Federal loans are a source of funds available through a growing number of government loan programs. Most of the federal loans you hear about in the news today are geared toward either mortgage loans or student financial aid loans. Both of these financial situations are causing a hardship within the American economy. The government has responded by trying to design programs that provide federal loans to individuals with debt problems – primarily in these two areas.
These federal loans are not without consequences or risks – although most of the risk is not on the shoulders of the borrower in most instances. The true risk of these loans is on the government and their ability to properly design, fund and administer these programs. Federal loan programs have traditionally been very narrowly designed to benefit a very small percentage of Americans. The federal loans were not easily discovered and the paperwork and accompanying waiting periods made the use of federal loans a last resort for many.
The reality is that federal loans through many government programs are the best source of funding available to those trying to eliminate burdensome debt. The terms of the loans are generally very favorable and eliminate a great deal of risk from the debt portfolio of the average American. Federal loans can be found in a variety of areas, but the Internet is fast becoming the most popular means of locating appropriate programs and then completing the steps needed to secure a federal loan. Traditional lenders in some cases may not be able to provide much assistance as these programs are very specialized and often have arrangements with particular lenders and servicers to administer the programs.