College Loan

From LoveToKnow College

For many students, a college loan can put a college education within their reach for the first time.

College Loan

Federal Stafford Loan

Subsidized Loans

Students must demonstrate financial need to qualify for a Subsidized Stafford Loan. The federal government pays the interest on subsidized loans during school and any grace or deferment periods.

Unsubsidized Loans

Unsubsidized loans are not dependent on financial need. Students must pay for all interest accumulated on the loan, although they may defer the interest until it's time to repay the entire loan.

Eligibility

  • Full- or part-time undergraduate, graduate, or professional student
  • U.S. citizen, national, or eligible non-citizen
  • Must submit a FAFSA form
  • Sign a Federal Stafford Master Promissory Note

Limits

Yearly loan limits vary from $2,625 for a first-year dependent undergraduate student to $38,500 for health professionals. Lifetime limits range from $23,000 for a dependent undergraduate to $189,125 for a health professional. Students may combine subsidized and unsubsidized loans to reach this limit.

Repayment

Loans must be repaid within ten years, although deferments and graduated payment plans may be available.

Federal PLUS Loan

Parent Federal PLUS Loan

Parent Federal PLUS Loans are available for parents of full- or part-time dependent undergraduate students. The parents must undergo a credit check to qualify for these college loans. The yearly and lifetime loan limits are equal to the actual cost of a child's education, minus other financial aid. Repayment must begin 60 days after receiving funds, with up to ten years to repay the entire loan. Extended or graduated repayment plans may be available.

Graduate Federal PLUS Loan

Full- and part-time graduate and professional students can qualify for Graduate Federal PLUS Loans if they have acceptable credit. Students may borrow an amount equal to the total cost of their education, minus other financial aid. Repayment must begin 60 days after receiving funds, with up to ten years to repay the entire loan. Deferment may be available.

Federal Perkins Loan

Federal Perkins Loans are distributed by colleges. Made up of a combination of school and government funds, they are a low-interest college loan option.

Eligibility

Individual schools determine eligibility requirements, although they typically include financial need.

Limits

Students can typically borrow up to $4,000 for each year of undergraduate wrok and $6,000 for each year of graduate or professional schooling although, again, the specifics of this program vary from college to college.

Repayment

Since the school is the lender for Federal Perkins Loans, students must repay the school directly, separate from any other loan payments.

Private Loans

Eligibility, limits, and terms of repayment for private loans vary greatly from provider to provider. Some private loan companies include:

Do You Really Need A College Loan?

Loans have become so common many students don't stop and think if they really need to borrow money to pay for their college educations. Some questions to consider before saddling yourself with future debt include:

  • Have you filled out your FAFSA to learn if you're eligible for any federal grants?
  • Have you searched for scholarships?
  • Are you making the most economical school choices? Could you start at a community college and then transfer to a four-year university? Will a public university provide you with a suitable education instead of attending the exclusive private college?
  • Do you have any savings you could use toward the cost of tuition?
  • Can you get a job to help pay for tuition costs?
  • Can you borrow money from your parents or a family member? This won't remove debt completely, but you may be able to negotiate better interest and payback terms with a relative.

 


Comment on College Loan



(Displayed with your comment)                        (Will not be displayed)
Verification Code:   
    

College Categories
LoveToKnow Tools
More Articles