This section is ideal for students and parents of students applying for financial aid. When grants, federal work-study, scholarships are not enough to cover the cost of tuition, there are loans. What differentiates loans from grants and scholarships is that loans must be repaid later unless there are special circumstances.

Overview:

Student loans are one of the most common ways to finance education. There are Private Student Loans and Federal Student Loans. The latter includes the Federal Stafford Loans, Federal PLUS Loans, and Federal Perkins Loans. The variety of loan options requires different eligibilities and offers different interest rates, borrowing limits, fees and repayment options.

Key Loan Components:

Private Student Loans: Private student loans are offered by financial institutions that underwrite the loans and determine the interest rates. Generally, you should only consider private loans if you cannot receive Federal Student Loans by filing FAFSA, which may still help you obtain grants and other forms of student aids.

Federal Student Loans: Federal Student Loans differ from Private Student Loans because these loans are provided by the government.

Federal Stafford Loans: Federal Stafford loans are fixed-rate student loans for undergraduate and graduate students attending college at least half-time. Stafford loans are the most common and one of the lowest-cost ways to pay for school.

Federal PLUS Loans: Federal PLUS Loans are a type of federal loan offered to the parents   of students to fund their post-secondary education. Since July 1, 2006 graduate and professional students are also eligible for PLUS loans.

Federal Perkins Loans: Perkins Loans are need-based student loans offered by the U.S. Department of Education. The loans are made available to American college students to finance their post-secondary education.

Looking for suitable student loans is always an important yet difficult task for students and parents. Our team at Money Economics did ample research on this topic and consolidated useful information to help you make decisions that work best for you or your children.


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