Do you find yourself in the predicament on how you will afford your college tuition? Most students first thought turns to financial aid as their savior. This can help make your dreams of attending college and getting that degree a reality. Receiving financial aid is not a piece of cake though. It can be a fairly difficult process and one that has many options available to students. If you have tried to apply for all the scholarships and grants that you can, your next avenue will be that of looking into student loans. There are two basic types of student loans on the market. They are the Federal Student Loan and the Private Student Loan.
Maybe you have found that you have been granted all the scholarship money that is possible and now you are still short on your tuition. Which way should you turn? Federal or Private?
Federal Student Loan: If you find you need to borrow funds to cover costs of college, you should begin checking into bonds first. The largest positive associated with the Federal Student Loan is the length of the loan and the low rate for interest. A full listing of the most popular advantages of a Federal Student Loan are:
1) The Low Rate Of Interest
2) Offer To Push Off Payments With A Student Loan Deferment Program
3) Longer Duration Term For Loan Repayment
4) More Attainable Credit Requirements
In order to obtain financial assistance through the Federal Stafford Loan or the Federal Perkins Loan, you will be required to fill out the FAFSA document. The two main Federal Student Loans are:
Federal Perkins Loan: This type of Federal Student Loan is a relatively small loan for students who have a special financial need as pointed out on your FAFSA application. You will be able to get a loan up to $4,000 each school year and students approved for extraordinary need will be granted up to $6,000 each school year.
Federal Stafford Loan: This type of Federal Student Loan is available more widespread to a higher amount of students. The amount you are able to get each school year will greatly depend upon if you are found to be financially independent or financially dependent, which school you are attending, and the current amount of tuition for the year. The financial aid department at your college will be determining if you are eligible for this loan or not. The Stafford Student Loan can be either subsidized or not. Your financial requirement will be the deciding factor in your eligibility. A subsidized Stafford Loan is also decided upon by your financial requirement. This type of loan allows the government to cover all interest while you are enrolled in college, while you are within a student loan deferment program, and during your grace period. An unsubsidized Stafford Loan is available to all students regardless of financial requirement, however, you will be financially responsible for all interest accrued on the loan.
Federal P.L.U.S. Student Loan: This type of loan, P.L.U.S., stands for Parent Loan for Students. This type of loan offers a lower amount of interest to parents of the college student. Annually, parents of the students can get an amount totaling the amount of time the student is in classes less any other financial aid that has been received, such as, other student loans, grants, or scholarships. The Federal P.L.U.S. Student Loan is not based upon financial requirement but anyone who applies for this type of loan is required to have a credit history check done.
Learn more about Federal Student Loans – http://www.direct.ed.gov/
Private Student Loan: This type of loan is added up to enhance other Federal Student Loans and can be acquired through your college, financial institution, or lending facility. These are mostly used to take care of expenses that occur after your other student loan has been wiped out. When dealing with a private loan, it is important to understand that the terms associated with them can differ greatly from one institution to another. What they offer to you will also be greatly based upon your credit history report. If your credit is not the best, be aware you might be required to have a co-signer in order to move forward with it. Your interest rate associated with the loan along with any fees you will be required to pay will be determined by the lender. Many options can be made available to you by utilizing a Private Student Loan. You maybe able to receive additional benefits when dealing with this type of loan when you apply for a deferment of your loan amount. You could receive special reductions in your interest rate or even rebates.
No matter which type of loan you decide is right for your situation, it is so important to take your time and never jump in head first without knowing all of the details. Keep in mind that any loan you take out MUST be repaid. It is also important to remember that it is not the loan’s job to cover each and every expense associated with your college experience. You may find that you have some straggling, outstanding expenses that were not covered by the loan but utilizing student loans can assist you in getting the college degree that you need in order to get ahead in life.