Student Loans Guide

Student Loans are another form of Financial Aid for students to pay for their college education. They come with certain perks: the interest rates are usually lower than regular loan’s, and a student only has to pay interest until graduation. Student Loans are usually funded by the federal government, and will pay for anything to do with a student’s college education (i.e. tuition, room & board, books, etc.) Below, we have listed the top five types of student loans available, their main characteristics, how to apply, where to find the application, and resources for more information.

Read more articles on: Financial Aid
Financial Aid for Online Education
Financial Aid FAQ
Financial Aid Basics
Alternatives to Federal and Private Aid for College
Federal Aid vs Private Aid
Guide to Financial Aid Scam
Student Grants Guide
College Scholarships Guide

Federal Student Loans

Perkins Loans

(The National Defense Student Loans, National Direct Student Loans, and Perkins Loan Program)

Low-interest loan
Must attend one of the 1,800 institutions that participate in the program
Can cancel loan if you choose to do public, military, or teaching service
- The institution will be reimbursed
- Money goes into the revolving loan fund
Money for the loan comes from
- FCC (Federal Communications Commission) contributions
- Loan cancellation payments
- Institutional matching payments equal to 1/3 ofthe FCC contributions
- School-level collections of earlier student loans
Students must first fill out the FAFSA in order to apply for a Perkins Loan
For the application and more information:
http://www.ed.gov/programs/fpl/index.html

Stafford Loans

Most students are eligible for Stafford Loans
They don’t depend on credit score or other financial criterion
Undergraduate Stafford Loans
- Subsidized
- Unsubsidized
- Benefits
Graduate Stafford Loans
- Fixed-rate student loans
- Student must attend institution for at least half-time
- Subsidized
- Unsubsidized
- Benefits
Students must first fill out the FAFSA in order to apply for a Stafford Loan
For the application and more information: http://www.staffordloan.com/stafford-loan-info/graduate-stafford-loan.php

PLUS Loans

Graduate Students
- Low, fixed interest rate (8.5%)
- Loan is not need, but credit based
- It’s very much like a private student loan, buthas federal guarantee
- Student borrows the total cost of graduate school that he/she needs
- Payments of loan can be deferred during enrollment in an institution
- Cosigner is NOT required
- Has a tax deductible interest
- Loaner sends money directly to the school
- The school must be a part of the FFELP (Federal Family Education Loan Program), which includes online institutions
- For the application and more information: http://www.gradloans.com/graduate-plus-loan/
Parents or Guardians
- Parents must fill out this application for their child/children enrolling in undergraduate school(s)
- Student must be enrolled at least half-time in school
- Low, fixed interest rate (8.5%)
- Can receive 0.25% interest rate discount if enrolling in auto-debt from a bank account
- Loan is not need, but credit based
- Parent or guardian borrows total cost ofundergraduate school
- Loan has flexible repayment options
- Can defer payment of loan if parent or guardian has financial problems
- Parent or guardian can cancel loan
- Collateral NOT required
- Has a tax deductible interest
- Loaner sends money directly to school
- Check if the institution requires the FAFSA with application of PLUS loan
- For the application and more information: http://www.parentplusloan.com/plus-loans/

Consolidation Loans

Combine student and parent loans into a single loan from one lender
Pays off balances of other loans
Available for most federal loans such as Stafford, PLUS, SLS, FISL, Perkins, Health Professional Student Loans, NSL, HEAL, Guaranteed Student Loans, and Direct Loans
Interest rate is weighted average of interest rates of consolidated loans and rounded upto the nearest 1/8 (maximum 8.25%)
Free to consolidate loans
Married students and students & parents cannot consolidate loans together
Students or parents can consolidate loans with any lender
For more information: http://www.finaid.org/loans/consolidation.phtml

Private Student Loans

Private student loans [private vs federal article above]must be funded by private and public organizations and groups other than the government. Each private student loan has it’s own set of criteria – some offer aid only to people of a certain race whereas others offer aid based solely on need. Students must check with their institution’s financial aid office before applying for a private student loan, because some schools do not accept certain private student loans. Below, we have listed some private student loans from particular organizations. If these do not meet your needs or you are not eligible, you can research other private student loans that will work for you.

Remember to check if:

The interest rate is fixed and tax deductable
You needa cosigner or collateral
You cancancel or defer payment
The loan is need based or credit based
The loan is subsidized or unsubsidized
The institution must be a part of the FFELP
You must submit the FAFSA
You must be enrolled at least half-time at your institution
The amount you can borrow is fixed or flexible
The loan pays for any part of the education or a specific part (i.e. tuition only)
The loan offers any discounts or charges any extra fees
The lender will send the loan directly to the school