How you can get loans to pay for college

Last week, we gave you some ideas on securing scholarships and grants. Today we tackle loans.  

It’s likely that whatever grants and scholarships you receive may not completely cover the cost of college. So, you may have to borrow some money. There are many loans available:

Federal Perkins loan  is a low-interest loan, ranging from $900 to $2,000. To be eligible, you need to be enrolled at least half time, maintain eligibility requirements and have financial need.

Federal Direct Stafford loan. There are two types of Stafford loans – subsidized and unsubsidized.

  • A subsidized loan, which has a fixed interest rate of 3.4%, is awarded based on your financial need. The federal government pays the interest on the loan while you’re in school and during any grace and deferment periods.
  • An unsubsidized loan, which has a fixed rate of 6.8%, is not based on your financial need. Since the government doesn’t pay the interest, you’re responsible to pay it, either while you’re in school or after you graduate.

Federal Director PLUS loanThese loans are available for parents, adoptive parents or stepparents of students. Once you’ve subtracted all other sources of financial aid from the cost of attendance, you can borrow money to cover the remainder at a 7.9% fixed rate.

You can also borrow money from a private lender. If you take this route, please keep in mind that each lender will have different eligibility requirements, loans rates, and terms and conditions. You’ll want to be sure to ask your lender all of the questions you have.

We also suggest you take advantage of all the other available aid first before you borrow from a private lender.

Next: Federal Work Study.

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