About Loans for College
These days, college education has become more important than ever before. But unfortunately, its costs have been skyrocketing in the past few years, leaving plenty of students no choice but to take loans in order to cover tuition, study materials and living expenses.
Generally, college tuition in the United States ranges from 10,000 to nearly 60,000 dollars per year. It can be a huge burden for most students and their families. For them, loans for college are one of the most common and sought-after ways to obtain financial aid.
About College Loans
College student loans are a type of aid offered by the federal government, commercial banks or other financial institutions to support college students who are facing financial constraints. These loans are usually tailored to meet student’s special needs and aimed to help them pay for their education when they don’t get enough scholarships and grants.
Today, college loans are available for both undergraduates and graduate students. Compared with other types of loans, student loans feature relatively lower interest rates, greatly minimizing the total cost of the loan and relieving the burden of repayment. Besides, they always come with longer repayment periods and allow students to defer the loan repayment until they have found a job after graduation.
Types of College Loans
As paying for college becomes a major concern for most students, government and private lenders are ready to help. They offer many types of financial aids, with options for every student. Some college loans can only be obtained by parents of college students; some require good credit and some are available to all.
Federal College Loans are funded by the federal government and can be the lowest-cost solution for you to cover your education expenses. To apply for a federal college loan, you will be required to fill in a free application of student aid (FAFSA) and then submit it to the US Department of Education (DoED) that is going to determine which type of federal loans you are qualify for and how much your family still need to pay for the college bill according to the information you provide on the FAFSA form.
Three major types of federal college loans include:
• Federal Stafford Loans
Stafford Loans come in two forms, either William D. Ford Federal Direct Loans or Federal Family Education Loans (FFELs). The latter is offered by the government and awarded based on student’s financial needs, while the former is funded by banks or private lenders.
• Federal PLUS Loan
PLUS Loans require borrowers to have a good credit history and can only be obtained by parents of dependent college students. There are also Direct Loans or FFELs PLUS Loans available.
• Federal Perkins Loan
As need-based loans, Perkins Loans are provided by some, but not all colleges. They often have no credit history requirements. When you graduate, you can make repayment directly to your college. Perkins Loans are funded by each college and it’s the school that determines how funds are allocated.
Private Lender Loans from banks, credit unions or other financial institutions are great choices for you when scholarships, grants or government student loans are not enough to pay the full cost of your education. For those attending vocational or online programs that furnish few financial aids, private loans are also a preferred option. Mostly, private lender loans have credit history requirements, so you’d better to find a co-signer if you’re not qualified.
Today, taking loans become one of the primary means for most students to pay for their college. Indeed, student loans can greatly offset your financial burden of pursuing higher education. Facing with so many loan options, you might find yourself torn as to which loan to choose. In that case, a better understanding of different loans for college students will be crucial in helping find the best solution to cover your college expenses.