The Student Loan
The rising costs of college tuition have made it
almost a necessity to apply for a student loan today. Students not only have
tuition costs, but the cost of books, meals, gas, cell phones, recreation, etc.
The variety of student loans enables students to take care of their varying
college expenses. A student loan however, is a loan that must be repaid under
specified circumstances.
Each of the following are student loans with differing conditions and time
frames for repayment:
* A Direct Student Loan is a loan with a schedule of repayment six to nine
months after the student has completed school. The Direct Student Loan is
distributed through the school the student is attending, which enables the
interest rates to be much lower than a Guaranteed Student Loan.
* Guaranteed Student Loans, also known as Stafford Loans have a low interest
rate. A student can apply for a subsidized or unsubsidized student loan. A
subsidized loan means the government pays the interest for you while you are in
school. The subsidized student loan is based on the students financial need. An
unsubsidized student loan means you will be charged interest while you are
attending school. The principal must start being paid after you have finished
school. Both types of student loans need to start repayment six months after the
student has finished college.
* Federal Parent Loans or PLUS loans as they are known is a student loan not
contingent on your income, but lenders do consider personal credit history.
Parents or guardians who have a dependent child enrolled in college at least
part-time are eligible for the PLUS loan. The interest rate is 9% or less.
Virtually any school or program will allow you to utilize the Direct Student
loan, Guaranteed Student loan or PLUS loan. It is very important to thoroughly
research all available options for funding long-term education. Your future is
tied to your funding, which is your student loan.
