Everything you need to know about student loans

It’s no secret that the cost of education continues to rise every year. Getting a good education is becoming more and more difficult to obtain without getting student loans to help defray the cost. The good news is that there are several different avenues available to students and their parents that they can take advantage of in order to pay for college.

The federal government is a great place for students and parents to find the money they need to pay for college. Even though federal student loans must be repaid, with interest, after the student graduates, they are generally cheaper and more flexible than most private student loans. It doesn’t hurt that they are generally easier to get, either.

The Federal Perkins Loan is a federal student loan program that allows the college to lend students with a demonstrated financial need access to money necessary to help defray the cost of college. Perkins loans allow undergraduate students the opportunity to borrow up to $5500 per year and graduate students up to $8000 per year from the college they attend at 5{075199423ee13b9d3c1ee2c97b8b1c831ef297e211b8124e99b132452d3c2c41} interest.

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The most common student loan is the Stafford Loan. In a Stafford Loan situation, the loans are made to students by the federal government. There are two different flavors of Stafford Loans: subsidized and unsubsidized. With a subsidized loan, students are able to borrow between $3500 and $8500 per year and do not accrue interest while the student is still attending school at least half time. Unsubsidized loans have greater limits ($5500-$20,500 per year), but the loan accrues interest from the date of origination, regardless of the students’ enrollment status. The best thing about Stafford Loans is that there are no credit underwriting guidelines, so students with less than perfect credit will qualify for the loans.

PLUS loans are loans for the parents of college students. Once again, PLUS loans are made by the federal government, but, unlike Stafford Loans, parents must demonstrate a certain level of creditworthiness in order to qualify for these loans. On the plus side, the upper limits of the PLUS loan are dictated by the cost of the students’ education minus any other aid they have received including grants and scholarships. And, the interest rate is generally much cheaper than other forms of financing. Graduate students and professional students will also qualify to receive PLUS loans as long as they meet all of the underwriting criteria.

The main thing to keep in mind with each of these loans is that they are, in fact, loans and require repayment. Students should attempt to locate funding through grants and scholarships before considering any loan product. Keep in mind that even though the Federal Stafford Loan and PLUS loans are funded by the federal government; you will need to work with an approved lender in order to obtain funding. For more information about these loans as well as other government education assistance programs visit https://myfedloan.org/
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