Selecting the most appropriate college loan(s) will help students for their education and avoid an unpleasant experience when repayment becomes due. Failure to comprehend the options, conversely, may well lead to unpleasant surprises and serious financial difficulties.
There are two main types of student loans; subsidized and unsubsidized. The important difference between the two is who pays the interest while a student is enrolled in college.
Subsidized student loans are available to students who demonstrate significant financial need. There is a ceiling on the amount of subsidized loan money students can borrow, however the government pays the interest on such loans while students are enrolled and during the first six months thereafter.
Unsubsidized loans require no financial need; everyone is eligible to apply for them, and they are available in larger amounts than are subsidized loans. However, students are responsible for the interest payments, thus the term "unsubsidized"..
Generally, students who qualify for unsubsidized loans need the maximum they are allowed to borrow. If they require additional funds, unsubsidized loans are also available to them.
Students can apply for the Stafford Loan or the Perkins Loan. Neither has to be repaid while students remain in college.
Parents may also take out PLUS loans for their sons or daughter. PLUS loans offer fairly low interest rates, but require repayment to begin within 30 days.
Even bankruptcy does not free students of the obligation to repay student loans. Lenders will virtually always work with people making a sincere effort to repay their loans, but those who attempt to evade their responsibilities and obligations are subject to wage garnishment and other serious penalties.
Because a college degree will increase your lifetime income by an average of nearly $1 million, it's a great investment. But, you certainly want to shop for the best terms you can get and avoid the temptation to borrow more than is necessary. - 16732
There are two main types of student loans; subsidized and unsubsidized. The important difference between the two is who pays the interest while a student is enrolled in college.
Subsidized student loans are available to students who demonstrate significant financial need. There is a ceiling on the amount of subsidized loan money students can borrow, however the government pays the interest on such loans while students are enrolled and during the first six months thereafter.
Unsubsidized loans require no financial need; everyone is eligible to apply for them, and they are available in larger amounts than are subsidized loans. However, students are responsible for the interest payments, thus the term "unsubsidized"..
Generally, students who qualify for unsubsidized loans need the maximum they are allowed to borrow. If they require additional funds, unsubsidized loans are also available to them.
Students can apply for the Stafford Loan or the Perkins Loan. Neither has to be repaid while students remain in college.
Parents may also take out PLUS loans for their sons or daughter. PLUS loans offer fairly low interest rates, but require repayment to begin within 30 days.
Even bankruptcy does not free students of the obligation to repay student loans. Lenders will virtually always work with people making a sincere effort to repay their loans, but those who attempt to evade their responsibilities and obligations are subject to wage garnishment and other serious penalties.
Because a college degree will increase your lifetime income by an average of nearly $1 million, it's a great investment. But, you certainly want to shop for the best terms you can get and avoid the temptation to borrow more than is necessary. - 16732
About the Author:
Janet Madden is the Director of Guidance at a large, urban high school. In addition to working with high school students, she advises adults in her school's evening programs on online colleges and accredited online degree programs.
