Today, university and college education is very expensive. However, this factor does not discourage students from seeking a university or college education. The college fee is normally paid by parents or a student can apply for credit. There are different types of student loans that one can opt for, both federal and private. Below we will have a look at some of the more popular student loans.
One type is the federal loan which is also referred to as federal Stafford loan. This loan has good terms which are beneficial to most scholars. It has low interest rates which are fixed at 3.4%. It is categorized further in two, the subsidized Stafford loan and the other is the unsubsidized loan. This loan has annual limits and lifetime limits with annual limits beginning at $9,500 for a first year college student.
A learner is offered the subsidized Stafford package according to his needs. The accrued interest on the credit will be wavered while the student is still schooling. Nevertheless, the unsubsidized loan is not given depending on the needs of the learner. The accrued interest on this type of loan will need to be paid by the student.
A student who is financially unable to pay his fees should apply for the federal Perkins loan. This type is meant to help needy scholars. It is resembles the subsidized Stafford loan. The Perkin’s interest rate is approximately 5%. Moreover, its grace period is longer so the loan will not need to be repaid until after the student graduates from college. The repayment period is set to ten years.
The other type of loan is the federal plus loan which is usually offered to parents with children who are pursing undergraduate courses in colleges. It is given on the basis of credit history of parents and the cost of attendance. The interest rate is low and interest begins accruing instantly.
While these loans can help a student to get through college they often are not enough to pay all one’s outgoing expenses. For this reason many students seek private credit to cover their remaining expenses. This type of credit is usually offered to learners who are independent and can repay the loan without asking for help from their parents. A student can take a private and a federal loan together. The private loan has interest rates that are either fixed or variable and usually higher than any of the federal offers.
A student can apply for any of these types of loans in order to make their time through college a little bit smoother.