Student Loans Offer Financial Aid

Student loans are well worth the investment, as college educated workers earn considerably more in their lifetime than those with only a high school education. College graduates will also experience less time unemployed. Student loans are a valuable solution when funds for education costs don't meet the need.

There are many types of loans for students needing to pay for their college education. Low interest federal student loans are available to supplement other sources that cover college costs, such as grants, scholarships, work-study, and family contributions. Perkins, Stafford, Parent PLUS, and Graduate PLUS loans are modest federal student loans guaranteed by the U.S. Department of Education and handled by various financial institutions.

Subsidized Perkins and Stafford student loans are granted to students with financial need, and interest is paid by the Federal government while the student is in school. Unsubsidized Perkins and Stafford loans accumulate interest while the student is in college. Both Perkins and Stafford college loans have a six month grace period after the student graduates, at which time students become responsible for repayment in monthly installments.

Parent PLUS loans are handled differently than Perkins and Stafford loans. Interest is fixed at higher rates, there is an origination fee, and parents are responsible for repayment from the time the loan is initiated.

Graduate PLUS loans may be subsidized or unsubsidized, are provided to graduate students, may be large enough to cover the entire cost of graduate education, and are the responsibility of the student.

After federal loan options are exhausted, students might wish to consider additional private loans, which have higher loan limits then federal student loans. Interest rates on private student loans can also be competitive, as are grace periods which allow for repayment to begin after graduation. ..... Read More