| The best thing to do is to get a Federal student loan. | | | | low-interest education loan for parents. |
| Federal loans are readily available to students. Private | | | | Each year, parents can borrow up to the cost of |
| loans are more expensive to pay back and are not | | | | attendance, minus other financial aid received such as |
| recommended if they can be avoided. | | | | scholarships, grants, student loans, etc. The PLUS loan |
| The reason Federal student loans are so available is | | | | is not based on financial need. Applicants must pass a |
| because graduates of college will usually make a lot | | | | credit check. |
| more money than other people. This gives the lenders | | | | Private loans are designed to supplement Federal loan |
| confidence that their money will be repaid. | | | | programs and are available from schools, banks, credit |
| Some of the most positive aspects of Federal student | | | | unions, and education loan organizations. They are |
| loans are: lower interest rates, options to postpone | | | | usually used to cover education costs that cannot be |
| payments, longer repayment terms and easier credit | | | | met by Federal aid. |
| requirements. Eligibility for some of these loans is need | | | | Terms for private loans very according to the lender |
| based, while others are not. | | | | and your credit history. Private loans have credit |
| The most common Federal student loans are: Federal | | | | requirements and you many need a co-signer. Private |
| Perkins Loans are a low-interest loan available to | | | | lenders have control of the money they are loaning to |
| students who have financial need based on | | | | you and may not offer deferment options. |
| information from their FAFSA. Federal Stafford Loans | | | | The lender determines the interest rates and fees |
| are available to undergraduate and graduate students. | | | | according to your credit history. Private loan programs |
| The loan amounts depend on a student's year in | | | | may offer the borrower benefits, such as interest rate |
| school and whether they are financially dependent or | | | | discounts, rebates and other incentives. |
| independent. These loans can be subsidized or | | | | One thing is for sure; all lenders want your business |
| unsubsidized. Financial need determines which type a | | | | because they make money that way. No matter what |
| student is eligible for. | | | | type of loan you take out, be conservative and |
| Unsubsidized loans are available to all students, | | | | borrow wisely. All loans have to be repaid rather they |
| regardless of income. Next, the Federal PLUS loans | | | | are Federal or private loans. |
| (Parent Loan for Undergraduate Students) are a | | | | |