What Varieties of Options are Out There in Student Loans?
Whether you are in your first 4 years of college or are attending graduate school you are paying several times more for your college education than your parents and grandparents paid. This increase makes it difficult for students. But there are programs out there that give much needed assistance.
Undergraduates typically rely on a complex mix of scholarships, grants and loans. Those loans are sometimes taken out by undergraduates alone, others by their parents alone, sometimes a mixture of the two as when the parent becomes a co-borrower or co-signer.
Stafford loans are very popular and there are two types. The unsubsidized loan is a bit more expensive because you are responsible for accrued interest from the very beginning of the loan. Though they cost more, these types of Stafford loans are easier to qualify for. A subsidized loan in which the government makes your interest payments until 6 months after you finish college are of course less expensive because you save on all that interest. However, these loans have stricter requirements, offered only to low-income families.
A detailed breakdown of what can be borrowed by who is available at: http://studentaid.ed.gov/PORTALSWebApp/students/english/studentloans.jsp or http://www.salliemae.com/get_student_loan/find_student_loan/undergrad_student_loan/federal_student_loans/stafford_loans/
Graduates, on the other hand, often have fewer options for scholarships and grants just at the time when tuition costs jump. But teaching and/or research assistantships usually more than make up the shortfall. They, in effect, have very low-paying (and very long hour) jobs while attending courses and doing research.
Recently a new option has become available to graduate students: PLUS loans. Though the acronym stands for Parent Loans for Undergraduate Students, they are now an option for many grad students. In the undergraduate case, parents are the borrower and are responsible for repayment. In the case of grad students, they become the responsible party.
The Pluses of a PLUS loan
Graduate students have one advantage that many people do not have. Most of them have not yet had the opportunity to get into a lot of debt and have credit problems. Since PLUS loan approval is based on your credit scores many graduate students are able to qualify.
Undergraduates typically rely on a complex mix of scholarships, grants and loans. Those loans are sometimes taken out by undergraduates alone, others by their parents alone, sometimes a mixture of the two as when the parent becomes a co-borrower or co-signer.
Stafford loans are very popular and there are two types. The unsubsidized loan is a bit more expensive because you are responsible for accrued interest from the very beginning of the loan. Though they cost more, these types of Stafford loans are easier to qualify for. A subsidized loan in which the government makes your interest payments until 6 months after you finish college are of course less expensive because you save on all that interest. However, these loans have stricter requirements, offered only to low-income families.
A detailed breakdown of what can be borrowed by who is available at: http://studentaid.ed.gov/PORTALSWebApp/students/english/studentloans.jsp or http://www.salliemae.com/get_student_loan/find_student_loan/undergrad_student_loan/federal_student_loans/stafford_loans/
Graduates, on the other hand, often have fewer options for scholarships and grants just at the time when tuition costs jump. But teaching and/or research assistantships usually more than make up the shortfall. They, in effect, have very low-paying (and very long hour) jobs while attending courses and doing research.
Recently a new option has become available to graduate students: PLUS loans. Though the acronym stands for Parent Loans for Undergraduate Students, they are now an option for many grad students. In the undergraduate case, parents are the borrower and are responsible for repayment. In the case of grad students, they become the responsible party.
The Pluses of a PLUS loan
Graduate students have one advantage that many people do not have. Most of them have not yet had the opportunity to get into a lot of debt and have credit problems. Since PLUS loan approval is based on your credit scores many graduate students are able to qualify.
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Before considering consolidation as a way to get out of debt, you need to consider the debt consolidation loan consequences. It's not always a good idea to consolidate your debt. Find out why on the Inside Debt Consolidation website
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