Student Loans

Class Location: The Internet

Description: By reviewing the following web page, students will learn an overview of the different types of loans available. As there is quite a variety, please review the details of each carefully. We have highlighted the most popular loans.

Prerequisites: Desire to find financial help for your college education.

Different Types of Loans:

Stafford Loans

These have the lowest interest rate most students will obtain on a loan. Annual limits for these loans range from $6,625 for college freshmen to $18,500 for graduate students. They are federally administered and can be either subsidized or unsubsidized. If you demonstrate the financial need, you will qualify for a subsidized loan. With these, the interest is paid by the federal government until you have been out of school for 6 months. For an unsubsidized loan, interest accrues the entire time you are a student. You do not have to show financial need to qualify for it.

PLUS Loans

Parents can take out PLUS loans to cover educational costs after passing a credit check. These are relatively low interest rate loans.

Consolidation Loans

These loans consolidate many federal loans into one larger loan. Consolidation lowers the payment by extending payback time of loans. You can apply for a consolidation loan by submitting the FAFSA application or through various programs as you are finishing your education. That may seem like a long way off, so don't forget!

Perkins Loans

While these carry the lowest interest rate of all student loans, you must demonstrate extreme financial need to qualify for these. The maximum amounts are set at $20,000 for undergraduate and $40,000 for graduate students.

Private Loans

Banks and other lenders can cover any costs through private loans beyond what the government loans provide. As these carry the highest interest rates, use this option only as a means of last resort. Make sure to read everything carefully before signing for this type of loan.