| Student loans can be quite complex as they have | | | | combination. |
| many variables. However, getting a student loan to | | | | 2. Perkins loan. This loan is the same as a Stafford |
| fund your college education should not be too difficult | | | | loan but currently has lower fixed rate (5%). You have |
| even if you have bad credit rating; this is because | | | | to demonstrate financial need to be awarded this loan. |
| most lenders (especially from the government) don't | | | | 3. Parent PLUS loan. As its name suggests, this loan is |
| consider credit rating as a major factor for qualification. | | | | given to parents for funding their child's college |
| They assume that most applicants will be going to | | | | education. The parent is the responsible party to pay |
| college straight from high school, and will not have a | | | | back the loan. This loan usually has larger amount than |
| credit rating yet. Another reason is because student | | | | the other types of loans. |
| loans are treated as investment loans (you're investing | | | | 4. Graduate PLUS Loan. This loan is like the Parent |
| in education for a better future). | | | | PLUS loan, but is given to graduate students only. If |
| There are many different types of student loans exist, | | | | you are a full-time or half-time student attending a |
| it's good to have some knowledge about them before | | | | graduate program, you may be eligible for this type of |
| you're applying for one. Basically, there are two | | | | loan. |
| sources of student loans; either from a government or | | | | All the loans above can be either subsidized or |
| private lenders. Government student loans are usually | | | | unsubsidized. With a subsidized loan, the government |
| preferable because they are subsidized and | | | | pays the interest on the loan while the student is |
| guaranteed by the U.S. government and have fixed | | | | attending school. With an unsubsidized loan the student |
| interest rates that are usually lower than most private | | | | is responsible for paying the interest. |
| student loans. | | | | For some people, student loans may be something |
| To apply for a government student loan, you need to | | | | they never have to deal with, but for those who are in |
| fill out the Free Application for Federal Student Aid | | | | financial need, a student loan can be one of the most |
| (FAFSA). This form will calculate your ability to pay for | | | | important financial investments they ever make in their |
| college and determines the tuition amount you need. It | | | | lifetime. We all know that a college degree can make |
| basically evaluates your financial needs for such loan. | | | | a big difference when it comes to employment or |
| The four major types of government student loans | | | | professional careers. Most employers prefer to hire |
| are: | | | | someone who has a college degree. Also, a college |
| 1. Stafford loan. This is the most popular type; it's | | | | degree could give you higher bargaining power when it |
| funded and guaranteed by the federal government; it | | | | comes to negotiating your salary package. |
| can be either subsidized or unsubsidized or a | | | | |