Educational college student loans have to be repaid; typically beginning six months after the college student stops enrolled at least half time or has graduated. There will be no interest or payment on a need based federal college student loan programs like the Federal Perkins College Student Loan or the subsidized Federal Stafford College Student Loan while you are enrolled. The College of your choice will determine the eligibility for college student loan programs by evaluating your application for financial aid (free online FASFA) and will let you know of your eligibility through an Award Notification (SAR Report).

The Federal Perkins College Student Loan is a need based college student loan that the college student may borrow up to $3,000. The interest rate will be fixed at 5%. The student loan will be interest free while the college student is in school and during a nine month grace period after they have left school. The minimum monthly payment is set at $40 and will begin ten months after leaving college.

The Federal Direct Stafford College Student Loan is a need based college student loan that a college student may borrow up to $3,500 in there first year and $4,500 in there second year. The interest rate will be a variable, with a cap of 8.25%. The student loan is interest free while the college student is in school and during a six month grace period after they have left school. The minimum monthly payment is $50 and will begin seven months after they have left school.

The Federal Direct PLUS College Loan is a non need based college student loan that a parent can borrow to cover additional and remaining educational expenses. The interest rate is variable with a cap of 9%, and carries the interest rate payments during the full length of the student loan. The minimum monthly payment is $50 and repayment begins 30 to 60 days after the college student loan has been fully disbursed. A credit check is required on all applications.

There is also Private or Alternative College Student Loans available for college students needing additional financial aid. A private or alternative college student loan is a loan in which the college student may borrow additional money to cover any remaining education expenses (including some housing costs). These college student loans are based on credit worthiness and are not guaranteed by the federal government. For more information, college students should contact the Financial Aid department at OTC. Private or Alternative college student loan lenders are many. You need to do your homework or talk to you financial aid advisor for lenders.

The Federal Direct Unsubsidized Stafford College Student Loan is a non need based student loan that a college student may borrow each year while they are enrolled in school. Dependent college students may borrow a maximum of $3,500 in the first year and $4,500 in the second year, if they are not eligible for the Direct Subsidized Stafford College Student Loan. Independent college students may borrow a maximum of $4000 each year in addition to the Direct Subsidized Stafford College Student Loan amounts. The interest rate is currently variable with a cap of 8.25%, and carries the interest rate payments during the full length of the student loan. The minimum monthly payment is $50 and will begin seven months after leaving school.