College expenses have increased dramatically over the past decade. When it comes time for you to choose a college, these expenses will factor tremendously in your decision. A college loan can help you pay for superior education, so you can enter a profession that will make it easy to pay that loan back. Before you read the rest of the article, you can do your research on personal loans. A Personal Loan can help you achieve your financial goals without putting too much strain on your financial health. This is also applicable for students as well. Besides that, you read all about college loans and decide for yourself.
Here are some things you should know about college loans.
- Out of all the financial aid given to students each year, 54% is given in loans.
- You will have access to a higher number and a wider variety of loans if your family has less money because many loans are granted based on need.
- Other loans, however, are given out based on the desire to help the family pay its share of college costs.
- Loans that are given out based on need will generally have lower interest rates and offer longer terms of payment.
Here are the four types of federal student loans that are available:
- Perkins Loans are given out based on need. They only charge 5% interest, and you do not have to make any payments on this type of loan while you are still in school. Only the students with the largest need receive Perkins Loans.
- Subsidized Stafford Loans are also based on need. Their interest is somewhat higher, with a fixed rate of 6.8% The subsidy you receive is the fact that the federal government will pay for your interest while you are still in school.
- Unsubsidized Stafford Loans are not given out based on need. However, you do have to pay the interest while you are still in school. You could capitalize on the interest, which means you add the interest costs to the loan, and once you graduate, you will owe more money than you would have otherwise, but you would not have to worry about interest while in college.
- Grad PLUS Loans are designed especially for graduate students and are given out by the federal government regardless of need. In general, a student can take out one of these loans for up to the total cost of education, less any financial aid that the institution gives him or her. This provides a larger capacity for borrowing, but the interest is higher, so it is suggested that students check out the Stafford Loans or the Perkins Loans before looking into the Grad PLUS Loans.
There are still other options out there for students looking for college loans.
Private student loans can come from lending companies or banks, or other financial companies. However, these usually have a higher rate of interest than the federal loans. One example of this type of loan would be the College Board Connect Loan.
Many colleges have their own loan funds. You can usually find information about college loans in the campus office or online. Interest and payment terms will vary by college, so you will want to check out each college’s individual information.
There are many private foundations and other organizations with their own college loan programs. There are hundreds of search websites on the internet devoted to helping you find the right college loans. There are even loans that parents can use for their children! With all of the resources out there, there is simply no reason to miss out on college if you want to go.