What Are My College Student Loan Options? | 09.27.10

Now, more than ever, there is quite a large array of loan and financial aid options available for both undergraduate and graduate students in need of extra money for school. The primary college student loan options available are: federal Stafford and Perkins loans, private student loans and federal PLUS loans.

Stafford / Perkins Loans

These loans are provided through the Federal Direct Loan Program, a division of the U.S. Department of Education. However, the Perkins loan actually is given to you by your school… so the process can seem a little convoluted at first glance.

To summarize the Stafford loan, there are 2 types: unsubsidized and subsidized. Subsidized Stafford loans are exclusively for students with strong financial need and and unsubsidized Stafford loans are available to all students who file a FAFSA.

Perkins loans are for students with exceptional financial need and are decided by the school’s financial aid department. The money actually comes from the government though, so it technically is a federal student loan.

Private Student Loans

Private loans are also referred to as alternative or supplemental student loans. They are credit-based — meaning you need to have a good credit score or a creditworthy co-signer to get one — and have a variable interest rate. Of all the college student loans, these can theoretically have the highest interest rates, though this totally depends on your credit.

However, private student loans also offer the largest variety in the form of borrower incentives. These can include co-signer release, graduation rewards, APR reductions and more depending on the lender.

Compare private student loan lenders and learn more »

PLUS Loans

PLUS loans come in two flavors: Parent PLUS and Graduate PLUS. Parent PLUS loans are only available for parents of undergraduate students and the Graduate PLUS loans are exclusive to graduate students. These loans are NOT transferable once borrowed, meaning the parent can’t force the student to take on the debt after graduating.

They are useful because they cover up to 100% of your total cost of attendance, while maintaining a fixed interest rate (currently 7.9% in 2010-2011) and several repayment plans.

** Please keep in mind that the Student Loan Network always recommends that you expend your available cash reserves, scholarships and federal student aid intelligently before you consider a private student loan.



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3 Responses to “What Are My College Student Loan Options?”

  1. WER says on April 18, 2011 at 12:31 pm:

    Dear Stafford Loan People:

    I received both a Subsidized and Unsubsidized Stafford/Ford Loan. I was living in a “Shelter” because I couldn’t find a job and the “Shelter” was wanting a “cut” of the money even though I worked for my keep.

    This is at the Univeristy of Illinois at Springfield. I was awarded the Stafford Loan in November of 2010, after midters. And since I was in Software Engineering, I need solid Web Access. The Shelter considered laptops as “contraband” On page 3 of 5 of the Shelter’s rules it states this. I personally gave a copy of this to the Dept. at UIS. I simply could not make up for a Semester in 3 weeks. I was had.

    I appealed the decision and got some backing. However, the Financial Aid Dept. put fall 2010 in “default” mode and they tried to force me into Spring Classes.

    It became a big political issues with the Financial Aid, Admissions and the Dept. I was on campus 3 times to try and clear this up. Eventually, My Stafford was cancelled in early 2011.

    They just wanted someone who once had to live in a “mission” out of their site. I tried to appeal but they just hung up the phones and the pittance I had from Fall 2010 was not enough!

    I still have the documentation. Why was I given a Stafford Loan 3/4 of the way through the Fall 2010 in the first place? The “Shelter” Tied my hands. I eventually moved out, but too late.

    How do I clean this mess up. I comes down to the Finan. Admins at UIS just didn’t want to even mess with me.

    What should be my approach?

    Walter

    roperw4@gmail.com

    Reply To This Comment
    • Student Loan Guru says on April 18, 2011 at 3:04 pm:

      @Walter- Your best bet is to contact the Department of Education directly as they are the ones who handle the federal aid. Their page on filing complaints against a school has a few steps you can take to start to resolve this problem.

      answers.ed.gov/app/answers/detail/a_id/24/session/L3NpZC85Q054clByaw%3D%3D

      Good luck.

      Reply To This Comment
  2. Evan Jacobs says on October 5, 2010 at 1:30 pm:

    What do you think of this post guys?

    Reply To This Comment

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