College is a great experience – learning about new subjects and meeting different people along the way. College is also a chance to learn about life!
College can be very expensive. Scholarships help offset the cost of college, but most people still need to come up with some of the money for their college education. What if you don’t have enough money saved in your account to pay for college? Fortunately, there are federal student loan options available.
The three types of federal student loans are: the Subsidized Federal Stafford Loan, the Unsubsidized Federal Stafford Loan, and the Federal PLUS Loan. Each of these loans normally offers a lower interest rate than other student loan options and the repayment on these loans does not begin until six months after graduation.
The Subsidized Federal Stafford Loan is based on need, which is determined by a Federal formula. A loan is "subsidized" because the government pays the interest for you during the following periods:
While you are enrolled in school at least half-time
During the six-month grace period after you stop attending school at least half-time
During periods of authorized deferment
The Unsubsidized Federal Stafford Loan is available to all students regardless of income. Because the government does not subsidize this loan, you are responsible for all interest that accrues while you are in school, in deferment, or during your grace period. You may choose to make interest payments while in school or you may defer (and accumulate) the interest until repayment.
The Federal Parent Loan for Undergraduate Students (PLUS) is a government guaranteed loan taken out by the parent of a dependent child who is enrolled at an approved school at least half-time and is making satisfactory academic progress. This loan is not based on need or income level. Parents taking out a Federal PLUS loan may borrow up to the cost of education minus other financial aid awarded, as determined by the financial aid office.
What method of funding are you looking at for college?
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Categories: College, Finances, Students