Types of College Education Loans
Your college education loan program can offer you a variety of federal and private student loans. Learn more about the different types of education loans here.
- Stafford loans - need-based federal education loans that students can receive directly from the government or through a bank or credit union. Stafford loans come in three forms that are outlined below.
- Subsidized Stafford loan - these loans are need-based and have relatively long terms and low interest rates. The loan is subsidized in that the federal government will pay the interest on the loan while the borrower is in school or in a grace or deferment period.
- Unsubsidized Stafford loan - these are long-term, low-interest loans that are not need-based. Unsubsidized Stafford loans are ideal for students who make too much money to qualify for other types of federal aid or need to supplement their existing college education loan program with extra funds.
- Additional unsubsidized Stafford loans - only available to borrowers who qualify as “independent students” according to the federal government.
- PLUS loans - federal loans available to the parents of undergraduate students who attend school at least half time. PLUS loans are also available to graduate students who are not classified as dependents for tax purposes. If you include PLUS loans in your college education loan program, you will have to pass a credit history check. With PLUS loans, parents or students can borrow up to the full cost of attending school.
- Perkins loans - these loans are reserved for borrowers with extreme financial needs. They have very low interest rates and do not accumulate interest until nine months after the borrower graduates or enrolls in school less than half time. Remember that Perkins loans will show up on your credit report, so timely payments are critical.
- Private loans - private student loans can fill the gap between the cost of attending college and the amount of federal financial aid you receive. Often, students don’t qualify for enough federal aid to meet their financial needs, in which case a private college education loan program may help. Private education loans tend to have higher interest rates than federal loans, and they require the borrower to meet certain credit and income requirements. Keep in mind that the interest rates of private student loans will depend on market conditions and your creditworthiness.
If you have questions, please check out our Frequently Asked Questions page.
