Types Of Student Loans
Currently, there are many types of loans that college students can apply for. Student loans come in the form of private loans given by banks and other types of financial institutions, while other loans may be given by the Federal government.
Some student loans, called Direct and Stafford Loans, are low-interest, based on a financial need and have long repayment periods. These loans can be subsidized, meaning that the government pays part of the loan’s interest, while the student is in school or during a deferment requested by the student. Alternately, some loans may be unsubsidized, meaning that the loan’s interest is paid by the student. Unsubsidized loans are generally not based on a financial need but do have low interest rates with long repayments.
Other loans that are unsubsidized are PLUS loans, which can be applied for by the parents of undergraduate college students. PLUS loans are low interest, based on credit history, and have shorter repayment periods of approximately 60 to 90 days after full- or half-time school attendance ends. Furthermore, there are limited PERKINS loans, which are given by the government in cases of extreme financial need. These loans are typically smaller, have low interest rates, and have a short repayment period such as 90 days after the student attends less than half-time enrollment or graduates from the school.