Monday, March 23, 2009

Types of Student Loans


By: Brandon Zimerman

Many students who are entering college take out students loans in order to pay for college, however some are not aware of the different kinds of students loans that are available.  Federal Stafford loans are awarded on financial need and are regulated by the federal government. There are three types of Federal Stafford Loans. A Subsidized Federal Stafford loan is long-term and need based and has a low interest rate. Unsubsidized Stafford Loansis long-term, non-need-based, with a low-interest rate. Additional Unsubsidized Stafford Loan are reserved for borrowers that are classified as independent students, as determined by Federal guidelines.

Federal Plus loans are available to to parents whose children are attending college as full or half time undergraduate students. The loan is given based on credit history and cost of attendance and payment generally starts 60-90 days after the students graduation.

Federal Perkins loans are awarded to students based on extreme financial need, and usually have very low interest rates. The interest starts to accrue 9 months after a student drops below half time enrollment or graduates.

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