Many students do not go through college without some type of financial aid. In most cases, this help comes in the form of a student loan. While receiving or being offered a student loan sounds like a wonderful plan for the future, there are some things to consider before taking the leap into debt. Borrowers that are not very familiar with the lending process are often best to take the safest route possible when it comes to student lending and borrowing. The safest student loans typically come from the government rather than a private lender.
What is a Safe Student Loan?
Federal student loans are often considered the safest loans to have. These loans do not have fluctuating interest rates. They also offer safety nets for protection in case things do work out right after college.
Perkins and Subsidized Stafford
This is the type of loan to go for if the borrower qualifies. In a Perkins and Subsidized Stafford loan the government assumes the fee for interest while the student remains in college. The borrower only takes over paying the interest when he or she is no longer a full time student. The interest rates are also a good deal. Perkins loans are a 5% interest rate while the Subsidized Stafford interest rate is less than 6.8%.
Unsubsidized Stafford Loans
Another fairly safe option for a student loan is an unsubsidized Stafford loan. These loans may be obtained by anyone regardless of qualifying for them. The interest does not have to be paid while the student is in school but it does build up. The government does not pay it. The loan repayments begin 6 months from the time the student graduates from college. The interest rate is 6.8% or below.
Plus Loans for Graduates and Parents
Plus loans are available to graduate students and to parents. The interest rate on these loans can be up to 8.5%. However, this is typically a better rate than many private loans that graduates and parents receive.
Banks and Federal Loans
Many banks and lenders offer federal student loans. These entities may also offer a special discount or rate.
Finding out More about Federal Loans
Completing student loans is not complicated. Applications for federal loans are also available on line. Stafford Loan offers much valuable information as well as applications for Stafford loans as well as parent and graduate PLUS loans. They offer a frequently asked questions section and a list of benefits from Stafford loans.
Federal Student Aid
The FAFSA site offers information and applications for applying for free student aide. If aide is denied, a federal loan may be offered.
