A decent college education is being put further out of reach of an increasing number of deserving students each year. One also needs to understand that it isn’t only the tuition cost that needs to be met in order to pay for a student’s college education.
There are several other major and miscellaneous expenses such as boarding, food, clothes, books, general recreation etc. which need to be taken care of as well. Under these circumstances, to get a student loan is probably the best option aspiring college students.
There are different options available as far as the type of student loan is concerned. This wide variety of loans gives students the power to pay for various college expenses. However, varying options also present a different kind of problem, especially when you are trying to comprehend which student loan scheme will work best for your needs.
In this article, we will discuss different kinds of college loans you can apply.
Let us take a look at the three chief categories of student loans:
1. Direct Student Loan: If one opts for Direct Student Loan plan, then they are required to repay the loan in six to nine months after, they have completed the course for which the loan was granted. The interest rates in a Direct Student Loan plan are lower compared to the other types of student loan plans, mainly because this type of loan is provided through the school in which the student has enrolled for his or her desired course.
2. Federal Student loan: Federal Student Loans, which are also known as PLUS loans have rates of interest as low as 9% or less. The most important feature of this student loan scheme is that the lenders only consider the applicant’s personal credit history and are in no way concerned with the candidate’s income. Guardians who have a dependent child, who is enrolled in full time or part time course in a particular institute are the only ones eligible to apply for this particular kind of loan.
3. Guaranteed Student Loan: Guaranteed Student Loan, which is commonly known as Stafford loan, is another popular option among the different Student loan plans, with a considerably low rate of interest. There are two parts to the Guaranteed Student Loan scheme. These are subsidized and unsubsidized. If one opts for a subsidized loan, then the government is liable to pay the rate of interest on the principal amount, while the student is in school. This type of loan is absolutely based on the financial requirements of the student concerned.
The other kind of Guaranteed Student Loan, that is an unsubsidized loan, requires the rate of interest to be paid while the student is still in the school and the principal amount needs to repaid after the completion of the course.
The borrower must start repaying the loan amount after six months of course completion, regardless of which ever type of Guaranteed Student Scheme he or she chooses.
Since higher school or college studies, are by no means inexpensive these days, it is extremely important to make the right decision while applying for a student loan. Although, it is assured that the three above mentioned types of student loans will be permitted by every college and course, you would be well advised to be meticulous in conducting your research on funding a college education program. Remember that the course your life will take is at stake, so make your decision only after you’ve found the best available funding option.