Student Loan FAQs
What are student loans?
An education loan is a form of financial aid that must be
What is a traditional student loan?
Most students rely on the federal government to provide their education loans. In most cases the type of loan they receive is a stafford loan, students with exceptional need can obtain a perkins loan.What is a Stafford Loan?
A Stafford loan is a federally subsidized education loan for students who are enrolled in an eligible program at least half time. All accredited schools are eligle; however, you must also meet other general eligibility requirements. There are two basic types of stafford loans:- Subsidized: A subsidized loan is awarded on the basis of financial need. While in school you won't be charged any interest before you begin repayment or during other deferment periods. The federal government "subsidizes" the interest during these periods.
- Unsubsidized: An unsubsidized loan is not awarded on the basis of need. You'll be charged interest from the time the loan is disbursed until it's paid in full. If you allow the interest to accrue (accumulate) while you�re in school or during other periods of nonpayment, it will be capitalized. This means the interest will be added to the principal amount of your loan, and additional interest will be based on that higher amount.
What is a Perkins Loan?
A Federal Perkins Loan is a low-interest (5 percent) loan for both undergraduate and graduate students with financial need. Your school, rather than the federal government, is your lender. The loan is made with government funds with a share contributed by the school. You must repay this loan to your school.What are Private or Alternative Loans?
Private loans are loans from a private lender, usually a bank. They are generally used to suppliment federal loans in cases where federally underwritten loans do not cover the cost of education.What are Parent Loans?
Parents can borrow a PLUS Loan from the federal government to help pay your education expenses if you are a dependent undergraduate student enrolled at least half time in an eligible program at an eligible school.What are private education loans?
Private Education Loans help span the gap between the actual cost of your education and the limited resources the federal government allows you to borrow. Banks and Private lenders offer these loans.How can I consolidate my student loans?
A consolidation loan allows you (or your parents, if they have a PLUS Loan) to combine several types of federal student loans with various repayment schedules into one loan with one monthly repayment. Your payments might be significantly lower than under the 10-year Standard Repayment Plan, and you might receive a lower interest rate than you�re currently paying on one or more of your loans.For More Information:
This information was derived from an article on