Need Based College Student Loans – prove you need it and it could be yours.

Federal Perkins Loan: These are the best loans for college students since interest rates are quite low. However, they also have the most stringent income qualifications.

Federal Stafford College Student Loan (Subsidized): These Stafford College Student loans are ideal since interest rates are low, (they vary each year but cannot exceed 8.25 percent). In addition, interest does not begin to accrue until six months after you leave school (as a graduate or otherwise) since the government basically waives the interest bill on your behalf. You may borrow between $3,500 to $8,500 per year, depending on your grade level.

State Loans: State-sponsored college student loans and their terms vary. Research your home state’s offerings, and if you plan on attending college in another state, you may qualify to apply there as well.

Non Need Based College Student Loans: Extra cash help for anyone who needs or wants it.

Federal Stafford College Student Loan (Unsubsidized): Similar to the subsidized, except interest begins to accrue as soon as the college student loan is disbursed – and Uncle Sam will not help you. However, students can choose to make interest payments during college or defer them until six months after they leave school. The maximum amount that can be borrowed is $3,500 to $20,500 (less any subsidized amounts received for the same period), depending on grade level and dependency status.

PLUS Loan (Parent College Student Loans for Undergraduate Students): Parents can borrow up to the annual total cost of attendance. New rates are set each July but cannot exceed nine percent. Repayment generally begins 60 days after the loan is disbursed.

Find more information about Stafford, PLUS and Perkins loans at the Department of Education’s website.

Private College Student Loans: Organizations and banking institutions offer private college student loans. These are often used to bridge the gap, provide a cushion for living expenses, etc. Rates, repayment plans, and borrowing limits vary, so be sure to do your homework and read all the fine print.

So, whether you are seeking college student loan information for yourself, your child or for your college student, you can find tools and information about grants, college student loans and scholarships very easily on the internet. Use the resources at your fingertips and have fun. The financial aid office of your chosen school is also an excellent source to utilize.

Private financial institutions (banks, credit cooperatives and loan and savings companies) lend money to families in co-operation with the federal government, thus offering low interest rates. The cost of such loans is affordable for students and their families, and under certain economic and family circumstances the government may even pay for some of the loan’s interest while the student is still studying (subsidized loan).

The federal government applies an initial charge of 3 %, and the financial institution granting the loan can charge a maximum 1 %. Both charges are automatically deducted from the loan. Students therefore receive the granted sum minus these charges.

A Stafford Federal Loan is a low interest and long term loan (normally lasts for 10 years) with many benefits to the student. Interest may vary but there is a limit to how much it can grow 8.75 %. Interest is reviewed on July 1st every year, and it is guaranteed by the federal government through the education department.

A Stafford Federal Loan is the most popular and widespread loan type among students because the repayment conditions are quite flexible. Sometimes the student can just pay a monthly minimum of USD 50.00, or they can choose a gradual installment increase.

Stafford loans options:

1. Stafford Federal Loan Subsidized
• Government pays for the entire loan interest while the student is still studying.
• Students do not repay interest until six months after they finished or left university.
• You need to prove your economic need to obtain this kind of subsidy. You also need to have applied for a Pell grant beforehand, and you must be either an American citizen or a foreigner with a permanent residence permit.

2. Stafford Federal Loan Non-subsidized

• Students pay for the loan’s interest while they are studying. You can choose whether or not to defer interest repayment while studying.
• If interest repayment is deferred, when you finish university you must repay the whole accumulated interest plus the pending capital, according to the conditions agreed when the loan was granted.

Parents can apply for a Federal Plus Loan covering the entire expense (tuition, administrative fees, books and material, accommodation and meals, transportation) for their son or daughter’s first university study. Any other government financial aid will be discounted from the sum granted. This is a federal government-guaranteed loan and it helps parents to cover their children’s studies with a low interest rate. There is no need to prove a situation of economic need, but the university selected may ask the student to apply for a federal loan in order to accept the student enrolment admission in the university. Parents need a good credit history and it will be checked that they have not unfulfilled repayment of other loans the past.

Interest rates and charges:

• Interest rates are variable but they cannot reach over 9 %. Rates are reviewed on July 1st every year.
• The federal government will apply an initial charge of 3 % and the lender granting the loan may charge up to 1 %.
• Both charges will be automatically deducted from the sum actually transferred to the borrower.

Repayment:

• You start repaying 60 days after the loan has been obtained. Paid interests may qualify for tax benefits.
• Usually people choose a fixed monthly installment, the minimum being USD 50.00.
• Loans can be issued by financial institutions or directly by the government (direct loan program).