Student Loan Information

Important Terms for Student Loans

Deferment – The ability to postpone payment of a loan for a period of time

Direct Loan – Loans made by the U.S. Department of Education

FAFSA – The U.S. Department of Education’s Free Application for Federal Student Aid

Interest – A loan expense charged to a borrower for the use of borrowed money

Fixed Interest Rate – A loan expense charged to a borrower that does not change over time

Variable Interest Rate – A loan expense charged to a borrower that can change over time

Grant – A form of financial aid or monetary assistance that does not have to be repaid and is usually based on need.

Perkins Loans – Loans awarded to undergraduate and graduate students with exceptional financial need.

PLUS Loans (Parent Loan for Undergraduate Students) – Low-interest federally backed loans that parents can take out on behalf of their undergraduate children

Scholarship – These are monetary awards that do not have to be repaid

Stafford Loans – Fixed-rate, federally-backed loans available to undergraduate and graduate students

Subsidized Stafford Loan – A fixed-rate, federally-backed loan available to undergraduate and graduate students where no interest accrues while the student is enrolled

Unsubsidized Stafford Loan – A fixed-rate, federally-backed loan available to undergraduate and graduate students where interest accrues while the student is enrolled

Types of Student Loans

Federal

• typically fixed and have low-interest rates
• Direct Loans
• Subsidized and Unsubsidized
• Parent PLUS Loans
• GradPLUS Loan
• Loans are deferred until graduation

Private

• Variety of Interest Rates
• Variable and Fixed Rate
• Lending Company not the Government
• Often need co-signers
• May defer payments until graduation
• Higher Borrowing Limits

Other Options for Financing

Home Equity Loan

Scholarships

Grants

Community or Junior College