It is no secret that college education in the US is expensive. In fact, most students in the United States require student loans to finance their education. There are two types of financing solutions available to them -- federal student loans and private student loans. Even though most students choose to go with federal student loans, looking at other financing options available can help you select a financing option that works best for you.
Federal Student Loans
The five types of federal student loans include:
1. Direct Subsidized Loans
A direct subsidized loan means it is funded by the government. It is a cost-effective loan, allowing undergraduates to borrow money for tuition and related expenses. With a direct subsidized loan, interest does not accumulate for the student while they are enrolled in an undergraduate degree program, including for six months after graduating.
Interest begins to accumulate after the grace period, which means the student needs to start making the required payments unless they get a deferment. Direct subsidized loans are based on the student's or their family's financial status. For this reason, it is difficult to qualify for this loan.
2. Direct Unsubsidized Loans
A direct unsubsidized loan accumulates interest over the lifespan of the loan. The student is responsible for paying off the loan with interest. Interest can add hundreds and sometimes, even thousands of dollars to the total repayment amount.
3. Parent PLUS Loans
The Parent PLUS Loan is available to the parents of the undergraduate student. It offers a fixed rate and flexible loan limits. Parents can only qualify for this federal loan if they have a good credit history. A bad credit card history is:
· Current delinquency of 90 or more on over $2,085 in total debt.
· Over $2,085 in total debt in collections or charged off in the previous two Read more
- Home Schooling and College Admissions
- The Future of Financial Aid and Scholarships
- High School Seniors Win $14million in Scholarships -- true or false?
- 11th Grade, heading to college -- What should I be doing? Part 4
- 11th Grade, heading to college -- What should I be doing? Part 3
- 11th Grade, heading to college -- What should I be doing? Part 2
- 11th Grade, heading to college -- What should I be doing for admissions and financial aid?
- Four-Year Myth -- What You Can Do Now
- The Four-Year Myth -- why are students not graduating in 4 years?
- On-Time Graduation is Not Optional
- 4th of July; Independence; Freedom 529 Plan Best Colleges Campus visits career college college application essay college planning college planning company college planning lake norman college planning strategies college scholarships colleges Cost of College Cost of College; College Affordability; essay writing Financial Aid Financial planning Generation Z heading to college high school juniors how to choose a college how to choose a major how to pay cash for college how to pay for bachelor's degree how to pay for college how to prepare for college jobs money for college online college consultants paying for college preparing for college prepping for college rankings Save for college scholarships for college Study Skills what to do as a high school junior