In our brief outline today we are going to discuss the notion of loans for students, everything that every student is to know about it while making a decision to take or not.
From the very beginning we should say that this kind of borrowing can be taken from national government or any private body, for instance, here should be mentioned banking institutions, credit unions. What makes a loan peculiar is that it always entails paying back with interest.
Understanding the nature of student loans
This sort of borrowing can be provided by Student Loans Company (England and Wales) and Student Awards Agency (Scotland).
It is possible to take more than one loan, but they all are to be of different types. That’s is why it is a crucial point to know about the existing types of loans for student, taking into consideration they basic differences in terms, conditions and interest rates.
Having a look at the basic types
- Federal Student Loan Programs
This type has a range of programs developed for students. The distinctive feature of such kind of borrowing is that the lender in this case is the federal government. One more thing that should be mentioned here is that the interest rates and the entire system of paying off the borrowed sum of money is rather attractive.
Let’s have a look at the Direct Loans Program. This program caters for eligible undergraduate and graduate students and is aimed at covering the cost of higher education.
Besides, you can be also interested in other offers, such as:
- Direct PLUS Loans for Parents. This kind is renowned for the following feature: the borrower in this case is a parent who takes a loan for his child- dependent undergraduate student, and APR is charged during the whole period.
- Direct Subsidized Loans for undergraduate students. No interest is charged if you comply with the following criteria- to be in school (part-time is also Ok), or during the grace period for Direct Subsidized Loans.
- Direct Unsubsidized Loan. Undergraduates and graduates are welcome; interest rate is a compulsory element and is chartered during the whole period.
- Direct PLUS Loans for Graduate Students. Interest rate is charged, the offer is for graduates.
- Direct Consolidation Loans. This type gives an opportunity to unite al the existing federal student loans into one. During deferment periods no interest rate is charged.
One can also choose The Federal Family Education Loan Program; the program also caters for Loans for Graduate Students, Loans for Parents, Consolidation and so on.
Private Student Loans
It is one more option for students to cover their expenses; it is not funded by federal body, so the interest rates and other criteria important for drawing upon a loan can vary depending on a lender that you are dealing with.
What you should know about this kind of borrowing, a private one:
- Being in school/ during grace/ and deferment statuses you can be asked to pay back
- Depending on a lender the interest rates can change, it can happen monthly
- interest is charged during all periods
- There is such an opportunity that Private loan deferment and forbearance options are to be limited.