| Student Loans | | | | Stafford Loan also has a much higher loan limit |
| For many students, the dream of getting a higher | | | | and is offered to both graduate and |
| education just isn't possible without the financial aid | | | | undergraduate students. |
| of a student loan. Fortunately, there are many | | | | Compared to the Perkins and Stafford Student |
| opportunities out there to apply for and receive a | | | | Loans, which are borrowed in the student's name, |
| student loan. And even better, is here to give you | | | | the PLUS Loan is completely different in that it is |
| all the knowledge you need to choose the best | | | | a loan for parents of dependent undergraduate |
| student loan for you. | | | | students. A big advantage of this type of student |
| Student loans generally come from two sources: | | | | loan is that it covers any remaining balance not |
| the federal government and private financial | | | | covered by other forms of aid - in essence the |
| institutions, such as banks. Both require | | | | loan limit covers your entire educational expense. |
| repayment of the loan, but that's where the | | | | Now that we've familiarized ourselves with the |
| similarities end. Let's take a look at both federal | | | | different types of federal student loans, let's |
| and private student loans. | | | | identify the attributes of a private student loan. |
| Federal student loans are sponsored by the | | | | This is a loan from a financial institution that takes |
| government and account for the biggest chunk of | | | | into account your creditworthiness, not your need |
| education loans. There are three main federal loan | | | | for aid. Your credit is reviewed by lenders and if |
| programs: The Perkins Loan, The Stafford Loan, | | | | approved, you can get a substantial size student |
| and The Parent Loan For Undergraduate | | | | loan in minutes, sometimes up to $30,000. A |
| Students, also known as PLUS. | | | | downside to private student loans is that |
| The Perkins Loan is the most affordable student | | | | repayment terms typically cap at 15 years, |
| loan, with an interest rate of 5% and low fees. | | | | compared to 30 years for a federal loan. Also, if |
| But it's also the hardest to get because it's only | | | | you become disabled or deceased, your heirs are |
| given to those who need it the most. And the | | | | required to payoff your student loan, whereas in |
| loan limit, at $4000, is the lowest of all three | | | | a federal loan, the loan is forgiven, making |
| federal student loans. | | | | repayment unnecessary. |
| The Stafford Loan comes with a variable interest | | | | As you can see, you have several choices when |
| rate that's higher than the Perkins, but lower than | | | | it comes to student loans. Making sure you |
| the PLUS Loan, due to the cap at 8.25%. As with | | | | choose the best option is a matter of getting |
| the Perkins Loan, this student loan does not hold | | | | informed on these choices, and picking to student |
| credit worthiness against the applicant. The | | | | loan that best fits your needs. |