Student loans are offered to help college students fund their education through the whole course. When thinking of building their schooling fund, students have a wide option. The sources of funds can be in form of scholarships, grant funds, personal savings or Federal student loans.
It is recommended that the student should first exhaust all avenues of a federal aid help before venturing into other areas like personal loans. The personal loans, though more convenient and easier to get come with a number of terms and conditions and are more expensive.
Some of the student loans for college students are:
l Stafford loans- These are federal loans that are directly given to students. The funding for the loan is via government money and will usually have a low-interest charge and better payment terms. The funding does not call up for any collateral or credit checks. The loans are added up and payment starts after graduation.
Subsidized Stafford Loans- These loans are payable after graduation. The rates are quite low at around 3.76% per year. The government takes care of the interest while you are schooling. Available to students with hardships. Un-subsidized Stafford-Loans- The student is fully responsible for paying all the interest. The interest is around 3.76%. All payments will be deferred until you graduate. It is available to all students.
l Direct Consolidation Loans- In some cases, students will receive their loans from different sources every year. This presents a problem as the student is supposed to pay the different sources when they graduate. The consolidated loan is offered to counter this problem. It is offered as a fixed interest loan with flexibility. The loans make it possible for the student to have lower monthly payments and still the repayment time can be extended.
l Perkins Loans- These are federal loans that are directly given to the student. The loans were quite popular with students, but they got discontinued after Sept 30, 2017. They will only be operating for those students who had received it before that date. Those students will continue to receive the periodical disbursements up to 2018 academic year. The loans were considered better than Stafford loans as they were fully subsidized and with a fixed rate of 5%.
l PLUS Loans- These available loans are in two parts. The Grad plus Loan is available to college students and the Parent Plus Loan is available to the parent of the college student to fund the student schooling. The loan is therefore available to both the student and the parent. The loan is through a federal government funding, but they differ with other loans in that there is no amount limitation. The loans have a fixed-interest-rate of 6.31% for the 2017 loans.
l Private loans- The other name for these loans is alternative education loans. The loans are offered when the student is unable to meet education financial needs through the federal funding. These loans available from private financial and lending institutions including banks, savings and loans institutions, credit unions and others. The loans are just like personal loans with same requirements like credit history and others.
l Health Professions Loans- The loans are for college students specializing in such fields as medicine, nursing, veterinary etc. The loans will be given according to the requirements of each of the fields.
The government takes education seriously and will ensure that every student is able to get funding, whatever the financial standing of the student is. That way the burden is reduced on both the parent and the student.