Loans

Student loans are funds that are loaned by banks to help students pay for their education. It is important to know that if you consider this option, the loan must be paid back with interest. These loans can be paid in installments. In many cases, the installments paid per year need to be recalculated due to family sizes or changes in income. There are several types loan options including:

Federal Direct Subsidized Loans:
  • Eligibility: Students must be enrolled at least half-time at a school participating in the Direct Loan Program.
  • Payment: The school determines how much is given to you through the loan which is about $3,500 to as much as $5,500.
  • Note: While enrolled in school there is no interest rate because the U.S. Department of Education covers it.
Federal Direct Unsubsidized Loans:
  • Eligibility: Just like subsidized loans, Students must be enrolled at least half-time at a school participating in the Direct Loan Program.
  • Payment: The payment amount varies between schools.
  • Note: The U.S. Department of Education does not pay the interest for unsubsidized loans during the grace period so students will have to pay back with interest included. Also, the interest rate for unsubsidized loans is as low as 3.73% which accrues during school.
Federal Direct PLUS Loans
  • Eligibility: The person applying for this loan is required to have a good credit score. If you are a parent applying for this loan, your child has to be an undergraduate.
  • Note: This loan covers the main college costs aside from other aid that is being used at the time. Also, there is an interest rate that accumulates over the school year with the rate being (6.28%).
Private Loans
  • Offered by banks, credit unions, or other financial institutions and they can be used for things like education, personal experience, or buying a home.
  • Eligibility: you’ll usually need a good credit score to qualify. If your credit isn’t great, you might need a co-signer
  • To be able to apply, you need to meet with certain requirements for both Federal and Private Student Loans:
Federal Student Loans
  • Loans provided by the U.S. government to help pay for college or vocational school.
  • Eligibility: To receive a Federal Student loan, it is required for the person applying to be a U.S. citizen or a permanent resident. Also, it is necessary, to be registered for at least half-time of the course, to be registered in programs such as a certificate program as well as be in an eligible degree
  • You need to have applied for the Free Application for Federal Student Aid (aka FAFSA).
  • Academics must be held at satisfactory or above for the institution.
  • For a subsidized loan, it is required to be a part of the financial need program but it’s not needed for unsubsidized loans.