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If you’re trying to further your education, the government can help. Several federally backed student loans are available to people with little or no credit. They can help you get an education and build your credit rating as you repay it.

Student loans for those with limited credit are backed by the government and can be obtained through your school. Stafford loans are an example of these. When lenders decide to award Stafford loans they usually do not check a borrower’s credit history.

The Perkins loan is another choice for students, where credit history isn’t a factor. The government backs Perkins loans, which are awarded to those deemed most needy. You may or may not qualify.

Perkins and Stafford loans are usually limited to a set amount each year. PLUS loans, which are offered to parents of students, are another government-backed loan option to pay tuition.

Lenders do not look at a borrowers credit score when deciding whether to award one of these types of loans. This is because they are backed by the government. They will check a potential borrowers credit history to determine if they have any late payments or defaults on other loans. If there are, the borrower may or may not be given the loan.

With federally funded loans, you have the option of deferring them in case of hardship or other issues. The loans provide very low interest rates, but must be repaid.

If a borrower falls behind on their payments, the government can act as its own bill collector. It has the power to confiscate federal tax refunds and garnish wages.

Don’t think declaring bankruptcy will put you out of the government’s reach either. Usually student loans are not forgiven in a bankruptcy. Federally funded student loans are a good option for those looking to continue their education. They have favorable repayment terms and can help students establish credit. – 35634

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