When you need aid for college, you want to make sure that you’re getting the best deal and that you can get ahead with whatever you plan to do. Here’s a look at some of the most common forms of financial aid for students.
- Federal Loans: There are two types of Federal loans that someone can receive as a part of their financial aid package. All of these loans require a student to be enrolled at least half-time to be considered.
- Stafford Loans- As long as you fill out the FASFA, you are eligible for at least some Stafford Loans. There are two types of Stafford loans. Unsubsidized Stafford Loans are loans that begin accruing interest as soon as the loan is taken out. Subsidized Stafford Loans are loans that do not begin accruing interest until you start paying your loans back after you graduate.
- Perkins Loans – these are need-based loans that the federal government provides. The best thing about Perkins Loans is that they are low-interest; even lower than the Stafford Loans. It’s the most inexpensive and flexible loan out there, but you have to keep a higher GPA and meet a certain socioeconomic level in order to be eligible.
Parent Loans- The most popular and well known parent loan is the Parent Loan for Undergraduate Students, or the PLUS loan. These loans are an option only if their financial aid package does not fully cover their tuition. The interest rate is still decent (currently it is 7.9%), but, unlike the Stafford and Perkins loans, it is highly dependent on a parent’s credit score.
Private Loans: Private loans are another matter entirely. Almost every financial institution offers some sort of student loan, including the ones you may get your Stafford and PLUS loans through. Unfortunately, these all accrue interest even while you’re in school, some don’t have grace periods after graduation, and their interest rates are higher.