Financial Aid Loan

About 2/3 of all college students have to take out at least one financial aid loan. The cost of a college education rises each year so you can expect the number of student who absolutely have to take out loans to continue to rise. The federal government and private institutions have risen to the need for these loans by providing a number of financial aid loan programs to students based on their income status, financial need and desire. You can choose to take out only federal financial aid loans or you can supplement them with private loan programs out of need or because you are getting a really great deal for repayment.

Private Loans
There are an incredible number of financial aid loan programs available from private lenders. They are all dependent upon the credit of the applicant and you can get a really great deal if you have excellent credit. The trouble is, most people who need loans have considerably less than excellent credit. If your credit is not so good you can always get a cosigner who has good credit to do the application with you. In many cases the cosigner is relieved of their duty to the loan once you have made a number of consecutive, on time payments during the repayment period. Private loans are generally considered the final supplement to an already completed financial aid loan package.

Federal Loans
There are several types of federal financial aid loan programs, each tailored to assisting the student in higher education. There are subsidized loans that do not accrue interest and unsubsidized loans that are available to people who do not have demonstrated financial need. All of the loans have exceedingly low interest rates, lengthy repayment terms and various payment deferment options

Perkins Loan – this financial aid loan is offered to students with financial need, has a low interest rate and limited funds per student. The repayment term begins nine months after you drop below half time, drop out or graduate.

Stafford Loans – these loans can be subsidized or unsubsidized, have the lowest interest rate available and are limited in funding only when subsidized. The repayment term for these begins six months after you drop below half time, drop out or graduate.

Parent Loan (PLUS) – this unsubsidized financial aid loan is taken out by the parents of the undergraduate or graduate student. The repayment period begins immediately and the loans can be consolidated upon disbursement.