The Student Loan
By John Williams
The rising costs of college tuition have
made it almost a necessity to apply for a
student loan today. Students not only have
tuition costs, but the cost of books, meals,
gas, cell phones, recreation, etc. The variety
of student loans enables students to take
care of their varying college expenses. A
student loan however, is a loan that must
be repaid under specified circumstances.
Each of the following are student
loans with differing conditions and time
frames for repayment:
• A Direct Student Loan is a loan with
a schedule of repayment six to nine months
after the student has completed school.
The Direct Student Loan is distributed
through the school the student is attending,
which enables the interest rates to be
much lower than a Guaranteed Student Loan.
• Guaranteed Student Loans, also known
as Stafford Loans have a low interest
rate. A student can apply for a subsidized
or unsubsidized student loan. A subsidized
loan means the government pays the interest
for you while you are in school. The subsidized
student loan is based on the students
financial need. An unsubsidized student
loan means you will be charged interest
while you are attending school. The principal
must start being paid after you have finished
school. Both types of student loans need
to start repayment six months after the
student has finished college.
• Federal Parent Loans or PLUS loans
as they are known is a student loan not
contingent on your income, but lenders
do consider personal credit history. Parents
or guardians who have a dependent child
enrolled in college at least part-time
are eligible for the PLUS loan. The interest
rate is 9% or less.
Virtually any school or program will
allow you to utilize the Direct Student
loan, Guaranteed Student loan or PLUS
loan. It is very important to thoroughly
research all available options for funding
long-term education. Your future is tied
to your funding, which is your student
loan.
John Williams is the student loan blogger
at http://studentloan.blogspot.com
He reviews student loans and interprets
often complicated financial data into
simple to understand language.
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