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Most college students have loans to pay for their education. Often
scholarships and family contribution cannot cover the expenses of a university
education.
Federal Student Loans Federal Student Loans such as the
Stafford Loan and Perkins Loan are awarded by the federal government. To receive
federal loans you must fill out a FAFSA.
Federal Loans can be subsidized or unsubsidized:
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Subsidized: The federal government pays the interest on the loan while
you're still in school. You are still responsible for the capital (the amount
of money granted). Perkins Loans are subsidized. Stafford Loans may be
subsidized.
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Unsubsidized: The federal government DOES NOT pay the interest. You must
pay back the capital and the interest on the loan. Stafford Loans may be
unsubsidized.
There are two advantages to federal student loans. First, federal student
loans often have lower interest rates than private loans. You will pay less
interest on your loan. Second, federal student loans have deferment options. You
don't have to repay your loans until after you leave college.
All federal student loans are awarded on a need basis. The financial need of
the student and family is determined by the information reported on the FAFSA.
Subsidized loans are awarded only to students that can demonstrate dire
financial need.
Federal Parent Loans The federal government also offers
unsubsidized loans to parents. PLUS (Parent Loan for Undergraduate Students) is
an unsubsidized federal loan for your parents. It is not deferred in the same
way as student loans.
Private Loans are acquired independently through banks or other
lending institutions.
Many students and parents seek
PRIVATE LOANS when scholarships and federal
loans don't cover all the costs of a college education. There are many
institutions that offer loans for this purpose. The loan process requires an
application and review of your financial situation. Often, you must offer
something up as collateral. After the institution reviews your application and
financial situation, you will either be approved for the loan or denied.
Other Loan Site:
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