logo
g Text Version
Beauty & Self
Books & Music
Career
Computers
Education
Family
Food & Wine
Health & Fitness
Hobbies & Crafts
Home & Garden
Money
News & Politics
Relationships
Religion & Spirituality
Sports
Travel & Culture
TV & Movies

dailyclick
Bored? Games!
Nutrition
Postcards
Take a Quiz
Rate My Photo

new
Creativity
Family Travel
Southwest USA
Irish Culture
Home Finance
Comedy Movies
Romance Novels


dailyclick
All times in EST

Clairvoyance: 08:00 PM

Full Schedule
g
g Colleges Site

BellaOnline's Colleges Editor

g

Student Loans

Guest Author - Susan D. Bates

Educational loans (commonly referred to as student loans) are loans awarded to qualifying college students to help them finance their education. If you are a student who is considering taking out an educational loan, it is important to understand the differences between the student loan types to help you make wise decisions for funding your education.

Below is information about common types of student loans in the United States.

Federal Student Loans

Federal loans are appealing to many students because they typically have lower interest rates and fewer fees than most private loans. Assistance programs are available under certain conditions for borrowers who have trouble repaying these loans.

To qualify for federal student loans, students must complete the Free Application for Federal Student Aid (FAFSA) and maintain satisfactory academic progress while in college.

Below are the common types of federal student loans awarded in the United States:

Stafford Loans
Stafford Loans are low-interest federal student loans available to those who qualify. These loans grant borrowers a six-month grace period following graduation before the first payment is due.

There are two types of Stafford Loans: subsidized and unsubsidized:

Subsidized Stafford Loans
Subsidized Stafford Loans are available to students who have a demonstrated financial need. The federal government will pay the interest on subsidized Stafford Loans while the borrowers are enrolled in college and during the grace period.

Unsubsidized Stafford Loans
Eligibility for unsubsidized student loans is based on enrollment. Therefore, college students who do not have to have a demonstrated financial need may qualify for these loans.

Students are responsible for the payment of the accrued interest of the loan from the time the loan is disbursed. Borrowers may pay the interest while attending school or allow the interest to be capitalized to the loan principal.

Perkins Loans
Perkins Loans are one of the most appealing types of loans because of their low interest rates. However, many students do not qualify for them. These loans are reserved for students who demonstrate the strongest financial need.

The federal government pays the interest on all Perkins Loans while students are enrolled in college. Following college, borrowers have a nine-month grace period before the first loan payment is due.

Parent PLUS Loans
Parent PLUS Loans may be taken out by parents of undergraduate students to help their children cover educational expenses. The interest rate is fixed and determined by the federal government. To be eligible for these loans, parents must undergo a credit check and be considered creditworthy. The parents are responsible for the repayment of Parent PLUS loans.

Payment on the loan begins at the time the loan is disbursed. However, repayment may be eligible for deferment while student is attending college. The federal government does not subsidize the interest on PLUS loans. Therefore, even if the repayment has been deferred, the loan will continue to accrue interest, which will be capitalized to the loan principal

Consolidation Loans
Once students are no longer enrolled in college, they may be eligible to consolidate their federal loans into one federal loan. Once borrowers have consolidated their loans, they cannot consolidate again unless they add a new loan.

Consolidation can help borrowers of multiple loans manage their loans because they will be making only one monthly payment. It can also help some borrowers meet their repayment obligations because the length of the loan is often extended and the monthly payments are lowered. The interest rate for consolidation loans is a fixed-rate based on the average rate of the loans that were consolidated.


Private Student Loans

Private loans are awarded through financial institutions. There are many lenders that offer these loans to students. Students who have a gap between their financial aid and educational expenses or living expenses might consider applying for private loans.

Students who do not qualify for traditional student aid might choose to apply for private loans. Private loans do not require a demonstration of financial need nor do they require students to maintain satisfactory academic progress while enrolled in college. However, students who want to borrow from private lenders will have to undergo a credit check. Those who cannot qualify for private loans based on their own creditworthiness may be able to qualify with a creditworthy cosigner.

Private student loans are often utilized only when all other means of educational funding have been exhausted. This is, in part, because private loans typically charge higher interest rates and require more fees than federal student loans. There are also few options for borrowers who have trouble repaying these loans after graduation. If you are interested in taking out a private student loan, it is important to compare the loan specifications offered by various institutions.


If you are considering taking out either a federal or private student loan to meet college expenses, it is important to make wise decisions about potential loan applications. Use the information above to understand the most common types of student loans available in the United states and compare available options.


This site needs an editor - click to learn more!

Add Student+Loans to Twitter Add Student+Loans to Facebook Add Student+Loans to MySpace Add Student+Loans to Del.icio.us Digg Student+Loans Add Student+Loans to Yahoo My Web Add Student+Loans to Google Bookmarks Add Student+Loans to Stumbleupon Add Student+Loans to Reddit




Financial Aid
FAFSA
Work Study
RSS
Related Articles
Editor's Picks Articles
Top Ten Articles
Previous Features
Site Map


For FREE email updates, subscribe to the Colleges Newsletter


Past Issues


print
Printer Friendly
bookmark
Bookmark
tell friend
Tell a Friend
forum
Forum
email
Email Editor


Content copyright © 2014 by Susan D. Bates. All rights reserved.
This content was written by Susan D. Bates. If you wish to use this content in any manner, you need written permission. Contact BellaOnline Administration for details.

g


g features
Top 5 Resume Tips

Informational Interview Questions to Ask

Informational Interviews - Finding Professionals

Archives | Site Map

forum
Forum
email
Contact

Past Issues
memberscenter


vote
Poetry
Daily
Weekly
Monthly
Less than Monthly



BellaOnline on Facebook
g


| About BellaOnline | Privacy Policy | Advertising | Become an Editor |
Website copyright © 2014 Minerva WebWorks LLC. All rights reserved.


BellaOnline Editor