Help us make
a difference. Details

When savings, grants, and scholarships don't cover the cost of attendance, student loans can make up the difference.   There are many types of student loans to choose from, and it's important to find one that is right for your particular situation. The two main types of loans are federal loans and private loans.  Here we will discuss three main types of federal loans:

Federal Stafford Loans - These are awarded based on financial need and are regulated by the federal government. They can be obtained from a bank, credit union, or directly from the government. There are three kinds of Federal Stafford Loans to choose from:

1. Subsidized Federal Stafford Loan - This loan is long-term and need-based, with a low-interest rate. The term "subsidized" means that the government will pay the interest on the loan while a student is in school or when the student requests a grace period or deferment.
2. Unsubsidized Stafford Loan - This loan is long-term, non-need-based, with a low-interest rate. This type of loan is best for students who don't qualify for other types of financial aid, or who still need more money in addition to other forms of financial aid. Almost all household incomes qualify, and "unsubsidized" means that the interest on the loan is the responsibility of the borrower.
3. Additional Unsubsidized Stafford Loan - These loans are reserved for borrowers that are classified as independent students, as determined by Federal guidelines.

Federal Plus Loans - These loans are available to parents whose children are attending college as full or half-time undergraduate students. They are awarded based on credit history and cost of attendance. The interest is low on this type of loan, but repayment usually begins within 60-90 days after full disbursement of the loan, or after the student graduates.

Federal Perkins Loans - Perkins loans are awarded to students based on extreme financial need, and usually have very low interest rates. The total funds available to be disbursed for these loans is limited, however, which means that the amount of the loan will likely be relatively low. The interest doesn't start to accrue until 9 months after a student drops below half-time enrollment or graduates. If you're not sure if you qualify for a Perkins Loan, ask a college financial aid advisor.

One important thing to note about these loans: they are reported to a credit bureau, which means that if you are late on payments, or default on your loan, it could damage your credit.

Sallie Mae is one of the largest student loan providers.  If you have additional questions about student loans, it is likely their website can help you, whether you are a student or a parent!  The link is below:

Sallie Mae Website