Government grants for school loans, what really does that mean? It does not make much sense if you want to think about it. The two things are totally different from each other. One is borrowed money that has to be start being paid back at a future date. The other is given away totally free and never has to be repaid. Imagine that, never having to repay the debt.
Loans are generally obtained by a person to help with their education because they need extra money. What I mean is people generally get student loans because their Pell grants don’t meet all the educational expenses or they don’t meet all the expenses associated with that education. For example, food, housing and other additional expenses you may have while attending college.
Student grants are money that never has to be repaid back to the government. However this free money as it is does come with requirements. You must attend your classes and also you must maintain a certin passing score. I think that passing score needs to be above a 70% or 2.5 G.P.A. I am not certain of this though, so be sure and ask the schools financial AID office for further information regarding student grants.
Now, if you are turned down for a grant that is a different story. Ask the financial aid office once again how you can obtain student loans. Then they will direct you and give you free information regarding that as well. It may not be a bad idea to still apply for loans even if you have been approved for grants. You never know when you might need extra money for future expenses associated with getting your education.
Loans generally are obtained though financial institutions and are guaranteed by the federal government. So, what that means is they are backed up by the federal government. In other words the bank will give you a good rate of interest many times because the government guarantees the loan. So, if you don’t pay the loan in the future then the bank will still get paid. They get paid by the government and you on the other hand have a whole lot more issues to face.
So, what can happen if you renig on the loan? If you don’t pay the loan back or default on it. The I.R.S. can take any moneies that you are due in the form of tax refund. Until the entire amount is paid back. They can also probably do a whole lot more so be forwarned. Do your best to pay back all of the money on time. That is always the best thing anyway.