4 Federal Student Loans to Consider

Federal Stafford Loans are loans based on student financial need and as the name implies, they are regulated by the federal government.† There are three categories of Stafford Loan: Subsidized, Unsubsidized, and Additional Unsubsidized Stafford Loan.† The Subsidized Stafford Loan is a long-term loan with a low-interest rate. Subsidized means that the government will pay the interest on the loan while you are attending school or when you student request a grace period or deferment.

Unsubsidized is also long term with a low interest rate, however it is not need-based and is generally a good option for those that don't qualify for other types of financial aid, or who still need more money in addition to other forms of financial aid.† Unsubsidized means that you are responsible for the interest. Payments can be deferred.

The additional unsubsidized Stafford loan is reserved for independent students and must meet several federal guidelines.†

Federal Perkins Loans are reserved for students in extreme financial need.† They have very low interest rates and you have the ability to defer payments for up to 9 months upon graduation or part time status.† The amount of funds available for Perkins Loans is extremely limited, which means the amount you receive will be low.† Recipients of this loan will likely need to supplement it with private loans.

Parent Plus Loans.† Plus loans are given to the parents of students attending college.† This loan is based on a borrowers credit score.† The benefit of this loan is that you are borrowing federal money, which means the interest rates will be low.† Some benefits include the ability to borrow the total cost of tuition The loans are non-need based, the interest may be tax deductible and they require no collateral, additionally the interest rate is fixed so there isnít a concern of rising rates.

Graduate Plus Loans.† This loan is a new program which enables students with a good credit rating to use federal funds to pay for graduate school.† Like the Parent plus loan they are not need based, the interest rate is fixed and the interest is tax deductible.† Additionally, a borrower can borrow up to the total cost of their tuition.

When it comes to federal loan programs there is a tremendous variety.† They can be an extremely beneficial solution to paying for higher education.

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