What are student loans?
If you are a high school student the next thing you need to take is to sign up for college. You will surely need some money to be able to do this, because college education can cost a lot of money. If you are someone independent or your parents could not afford to support you, then it is time to consider student loans to help support your college education. The Federal government made several financial packages that will aid the students to pass out of college and obtain a nice job.
There are two kinds of student loans and these are Private loans and Federal loans. All these loans aid a student in paying for his or her tuition fee, books, and as well as living expenses. One of the major benefits of these loans is the returning period which only starts six months after completing your education. The interest rate on the loan amount is usually very low. This is the reason why student loans are very attractive for students. Some of the most common Federal student loans are Plus Loan, Perkins Loan and Stafford Loan.
Types of Federal Student Loans:
- Stafford Loan – The Federal Stafford student loans are offered to students who want to study half time in under graduate or graduate courses. This is a famous type of loan which is normally availed by students since it is a fixed kind of loan and it has low interest rates. In this type of loan, a student can borrow $20,000 each school year. Students can get this amount from the Department of Education via the school they have chosen.
- Perkins Loan – This loan is offered to students who need financial assistance for attending graduate courses. The cost will be based on the students’ need and there is even a basic formula that is followed in order for the office to disburse the particular amount to the school where the student is enrolled. It is best to avail for Federal student loans as early as possible because this is on a first come first serve basis.
- Plus Loan or Pell Grants – This type of loan is offered to parents who want to give college education to their children. Parents who possess a good credit standing can avail Plus Loan to help pay for their children’s college expenses. The money that they could get can be spent to housing, supplies and more. The process is also similar to other Federal Loans. The EFC or expected family contribution is also reviewed upon so that the financial help office can come up with the exact amount of disbursement.
Private Loans – Some of the best loans that you could opt for:
Aside from Federal loans, there are also private lenders and banks who give student loans. The condition and procedure is similar to Federal Student Loans. The student should fill out and submit a FAFSA form to the lender together with the application. Some of these private student loans providers are Citi student loans, Sallie Mae, Chase loans and Monticello. Private loans will be based upon your credit standing. You will also need a co-signer with good credit standing to avail private student loans.