College Loan Types
Students preparing for college can often find themselves swamped in college loans. There are several programs designed to assist with financial need during school. To best capitalize on these programs, you must first know and understand the different programs and how they work. Here is a brief breakdown of college loans. Visit the main page of our blog here.
Federal Stafford Loan
A Federal Stafford Loan can be used to pay for direct educational costs that are not covered by already awarded grants and scholarships. To be eligible for a Stafford loan, the borrower has to be enrolled at least half-time. Repayment of the loan begins six months after the student graduates or leaves college. In certain cases, during times of hardship, the loan can be deferred longer then that.
Stafford Loans come in two forms – subsidized and unsubsidized. Subsidized loans are awarded dependent on financial need. Students who attended classes at least half-time are not charged interest while in school. Interest is also not charged during deferment periods and grace periods. Unsubsidized loans, on the other hand, are the exact opposite of subsidized. These loans always have interest and are not based on financial.
Federal PLUS Loans
Parents can opt to pay for their child’s education with a Federal PLUS Loan. Similar to the Stafford, the PLUS Loan can only be used to pay for direct expenses for school. Parents must also pass a credit check and repayment begins immediately within 60 days of loan disbursement.
Private Student Loans
Private student loans are funds sponsored by private lenders. Students who find themselves short of paying for college after receiving their federal loans can turn to a private loan. Lenders can offer students competitive interest rates with flexible repayment and consolidation options. Private student loans are available to both students and parents. visit the main page of our blog here.