Student Loan 2018-07-27

Why Education Franchises Should Focus On Federal Student Loans

Most college students these days take out student loans to pay for their higher education.

By Features Writer
Why Education Franchises Should Focus On Federal Student Loans

Federal student loan, also known as government loan, allows a student to borrow money for college directly from the federal government. With the rise in education culture, number of students enrolling in higher education is also increasing. Keeping this in mind, franchisors could consider options like a federal loan in order to provide ease to students, profiting their education business.

Types of federal loans

Franchises could suggest students for Direct Subsidized Loan (DSL) or Direct Unsubsidized Loan (DUL), depending on their financial needs. A DSL comes with no interest, while an undergraduate is in school for at least half-time. After the referred time period, a fixed interest is issued, which has to be paid by the students in a fixed time.

Whereas, in case of DUL the school decides on how much money would be awarded to a student as a loan, and not their financial requirements. Interest is charged during the loan tenure, increasing the total federal cost. Education franchisors should utilize this opportunity for making more business, guiding students with an easy path towards attaining knowledge.


Federal student loans generally are more flexible than private loans, as the borrowers can change their repayment options even after the loan has been disbursed. Also, unlike other private loans, educators could suggest federal loans which don’t require any strong credit history for the approval of the loan.  Therefore, franchisors can provide flexibility to the students by offering such loans.

Scott Weingold, Co-founder, College Planning Network, shares “Students don’t qualify for a private loan without a co-signer. If a student has a lot of credit in their name and job, they may qualify.”       

Education franchises serve best to those students who haven’t had enough time to build up their credits while opting for a federal loan. Being independent on credit, franchisors could allow students to take on the responsibility without asking a family member or friend to co-sign.

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