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

Unsubsidized Stafford Loanfixed-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