Alright folks, it’s more student loan talk today. Don’t be intimidated, whether it’s a DVD, a sweater, lunch money, or a library book, we’ve all borrowed something, ergo* we have all had loans. The main catch of a loan is that you have to return what you borrow, and unlike a library book, which you return all in one piece, with student loans you return what you borrow bit by bit. But because student loan lenders allow you to return what you borrow at a slow pace, they charge you interest.
Instead of borrowing a private or personal loan directly from a bank, many students (myself included) choose to borrow from the federal government, which typically offers loans with lower interest rates.
There are four kinds of federal loans:
1. Subsidized Stafford
2. Perkins
3. Unsubsidized Stafford
4. PLUS
Subsidized Stafford Loans are only available for students with specific financial needs. The benefit of a subsidized loan is that the federal government pays the interest on the loan while the student is in school.
Perkins Loans are very specialized loans, given to students with exceptional financial need. The school actually determines which students are eligible for this subsidized loan.
An Unsubsidized Stafford Loan is your average student loan, with the student responsible for the interest that builds on the loan during school, as well as during repayment.
A PLUS Loan is a loan for parents who are helping put a student through school. Here again, the family (not the government) pays for the interest that builds on the loan while the student is in school and during the repayment period.
For more information on federal loans, visit the Department of Education’s student loan site. Of course before you can apply for any federal loans, you have to fill out your FAFSA, the Free Application for Federal Student Aid! The information you enter on your FAFSA will determine your eligibility for subsidized loans. Parents choosing to apply for PLUS loans do not have to fill out a FAFSA but it is always recommended to do so.
*See, you can actually use those SAT vocab words!
One Response to “Federal loans for college”
Leave a Reply
Subscribe to this blog
Subscribe to RSS feed
Join Us
Become a fan of WiseChoice on Facebook
Follow us on Twitter
Categories
- Choosing a Major / Career (2)
- College Admissions (28)
- College Applications (10)
- College Search (12)
- College Transfer (3)
- Community College (1)
- Financial Aid (17)
- Greek Life (2)
- Just for Parents (3)
- Learning Difference (2)
- Life at College (9)
- Miscellaneous (2)
- Social Media (1)
- Topics of Interest (2)
- Visiting a College (5)
- WiseChoice (2)
[...] all the expenses and explore all of your loan options. (Watch out for those hidden college costs; Federal loans for college; Private loans for college – borrow [...]