Student Loans

At present, few students can afford to pay for college without engaging into some form of education financing. Actually, two-thirds or 65.7% of 4-year undergraduate students graduate with some debts. Most of these debts are from student loan programs offered by some loan institutions.

But what are student loans?

Student loans are financial aids intended to help qualified individuals in their studies. Student loan is one of the major forms of education loans.

Education loans actually come in three major categories: student loans (e.g., Stafford and Perkins loans), parent loans (e.g., PLUS loans) and private student loans (also called alternative student loans).

But based on surveys, among all types of loans many students rely on federal government loans to fund their educations. These loans do have low interest rates and do not require credit checks or collateral at all.

Student loans include the Federal Stafford and Federal Perkins Loans. But what actually are Stafford and Perkins Loan?

Perkins Student Loans

A Perkins Loan could be granted to undergraduate and graduate students with outstanding financial need. It is a campus-based loan program, with the school acting as the lender that uses limited funds to help qualified individuals in their educational financial needs.

It is the best student loan available. It is a subsidized loan, with the interest being paid by the federal government. There is a 10-year repayment period with a 5 % interest rate.

Stafford Student Loans

Stafford loans is considered to be the main federal loan for students. All Stafford Loans are either subsidized or unsubsidized. It comes in two kinds: the Federal Family Education Loan Program (FFELP) and Federal Direct Student Loan program (FDSLP).

Federal Family Education Loan Program (FFELP) loans are provided by private lenders, such as credit unions, banks, savings & some other loan associations. Examples are those offered by Citibank Student Loans.

While, Federal Direct Student Loan Program (FDSLP) loans are administered by Direct Lending Schools, and are provided by the US government directly to students and their parents.
How about other student loans?

In our tough times, sometimes your borrowing needs are not actually met by the federal loan programs. Lenders offer other diverse options as Private or Alternative Loans and Parent Loans.

These other options work most likely the same as that of a student loan. Of course there would be some differences in their credit scores and other terms and conditions. Just like in private student loans, credit scores often really matters.

As a result, it is very important for you to first try to examine what kind of loan would be best for you and would be suited for you.

Thus, there would surely be one particular type of loan that would definitely suit your needs and your capacity to repay in the future.