There
are many different types of student loans. The most common are:
1.
Stafford
Loans
If
you are going to get a Stafford loan, you should know about the
two types of those. The FFEL or Direct loan programs. Your school
chooses which type it awards. A FFEL loan is one in which your
lender is private, like Sallie Mae or Bank One, but these loans
are still federally insured.
With
Direct Stafford Loans, your lender is the Department of Education.
There is not much difference between these two types of loans.
2.
Perkins
Loans
The
Perkins Loan is awarded to students with extreme financial need.
The school is the lender and all Perkins Loans are subsidized,
and the interest rate is fixed.
3.
PLUS
Loans
PLUS
Loans are loans that your parents take out for your education
if there is no other financial aid available. The maximum amount
that your parents can get is equal to your cost of attendance
minus any other aid you receive. The PLUS Loan goes into repayment
60 days after the student starts school. You can learn more about
PLUS loans at
PLUS-Loan.org
4.
Consolidation
Loans
Consolidation
Loans are available for students with more than one loan who want
to have one monthly payment. The downside is that once you consolidate,
the interest rate is fixed and you can not re-consolidate the
loan again.
5.
Alternative/Private Student
Loans
Taking
out student loans is borrowing money, and it is very important
the you realize this before signing for the loan. Please take
a look at our Borrowers
Rights and Responsibilities page.
