All About Financial Aid Loans
After you have been accepted into the college program of your choice, you have to figure out how you are going to pay for your education. Simply put, education is expensive and the cost increases a certain percentage each year.
Grants, scholarships and work-study programs can take you only so far. The additional aid that finances many students’ educations comes in the form of loans. Financial aid loans come in a variety of packages, each with its own advantages and drawbacks. The only thing that is common among all of the financial aid loans, federal and private, is that they must be repaid at some point.
Perkins Loan
This is a need-based loan program for which the amount allowed is calculated by the Federal Processor (Education Department’s data processor). You have to fill out and send in your FAFSA early to be considered for a Perkins loan, usually by March 1st. Perkins loans have lower interest rates and the longest grace period (nine months) of all student loans so they are very much sought after. These loans are issued in order of application filed so there is no competition other than in terms of filing on time. The loans are awarded until the fund for them is exhausted and are given to undergraduate and graduate students.
Stafford Loan
This federal financial aid loan comes in two forms: subsidized and unsubsidized. They are a need-based loan that is calculated by the Federal Processor. There is no specific filing date for this loan which means it is available any time. Whether you file early or late you will be given the same amount based on your financial need and varies only by need and grade level. If the loan is subsidized the government pays the interest on the loan while you are a student at least half time; unsubsidized loans gather interest at all times. The grace period on these loans is six months.
PLUS
The Parent Loan for Undergraduate Students (PLUS) loan is a financial aid loan program available to parents of current students. There are programs available for undergraduate and graduate students, despite the name. This loan can be repaid during the course of the student’s studies, unlike most other types of financial aid loans. This loan does not have a deadline and most colleges accept this form of loan.
Private Loans
You can choose to take out additional loans from private lenders as per your need or desire. They are typically used to supplement financial aid and are often seen as a last resort method of balancing student financial aid after the federal programs have given a balance. The amount and the type of loan is your choice so it is a good idea to shop around for the best private financial aid loan available.
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