Go Through College With Student Loan

2007-03-08 10:33:40

( Financial )



Student loan is the solution initiated by the US government to aid students in financial matters while going through college. It offers several choices that fit the profile of the student and assists student in paying for costs incurred during college.

Unlike normal loan companies, student loan has a much lower interest rate and is relatively easier on the pocket. There are several types of student loans that make it easy for students to be granted a loan and pursue college education. Federal student loans are all supported and backed up by the government. A federal subsidized student loan is a type of loan that does not require the student to pay for the interest rates. The government is the one that pays the interest that is derived from the student’s loan. For this type, however, most grants are given to students who come from a family with low family income. For those that do not fall under the federal subsidized loan, they can apply for a federal unsubsidized loan. The only difference this has from the federal subsidized loan is that the student, not the government, pays for the interest. Both of these types of loans give you a grace period of about half a year after graduation before you are required to repay your loan. Both loans also don’t require you to have a credit history. The government grants loans to almost all students who apply.

Federal loans granted to parents are called PLUS loans, which means Parent Loans for Undergraduate Students. Instead of the students applying for the loan, the parents are the ones who do so. Consequentially, the parents are also the ones who will be paying for the loan. Take not that the student is not a cosigner of the loan. With this, you can borrow a larger amount, but you would have to pay immediately even during your child’s college years.

Private loans are also available. These are loans granted by private institutions such as banks. It requires you to have a good credit history and has a longer grace period after graduation without payment. Private loans have a one-time fee that serves somewhat as registration fee. However, the major benefit you could get from this is that you can have a higher credit limit. This is ideal for students who are not granted the federal subsidized loan because they don’t come from a low-income family but can’t go through college without assistance. The government and private lenders also offer student loan consolidation.

Student loan is very helpful for college students because it does not make financial insufficiency as the barrier to attaining higher education.


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