Types of College Loans
Many students will find that they will need to take a college loan so that they are able to go to college. Loans will need to be repaid and also have an interest attached to them. The interest is the fee that you are charged for borrowing the money.
Private organizations, colleges, state governments and federal governments provide college loans to students and parents. Here is an overview on the type of college loans that are available.
Need Based Loans
- The federal Perkins loans are awarded by colleges to students that display the highest need
- Federal direct subsidized loans have a borrowing limit attached to them which increases each year of school that you complete.
Non Need Based Loans
- Federal direct unsubsidized loans will allow you to add the interest fees to the amount you borrowed up until after graduation. This though means you will owe more.
- Federal parent PLUS loans will allow parents to borrow the total cost of college minus any financial aid they received.
State loans are also available but these are not need based or subsidized.
Private loans are generally not subsidized or need based. Private loans will also require a parent to commit to repay the money if the student fails to.…