| Students who look for financial aid during studies either | | | | Stafford loan option: |
| go for federal student loans or private student loans. | | | | It is the most common federal student loan, which can |
| Federal student loans are offered by the US | | | | be applied for by anyone. They offer fixed interest |
| government, which can be availed directly through | | | | rates and are in the form of subsidized federal student |
| banks, student loan lenders, school, or from Federal | | | | loans and unsubsidized federal student loans. When |
| Family Education Loan program otherwise known as | | | | the student avails the subsidized federal student loan, |
| FFELP. Federal loans are offered with very low | | | | the government pays the interest when the student is |
| interest rates, longer repayment periods, and various | | | | studying, but in the case of unsubsidized federal |
| kinds of repayment options with easy credit | | | | student loan, the student has to the pay the interest |
| requirements than the private loans. In case of federal | | | | but can defer making any such payments until he |
| subsidized student loan, the interest is paid by the | | | | completes his graduation. |
| government to the financial institution when the student | | | | PLUS loan option: |
| has been studying and also during the grace period. A | | | | It is otherwise known as the parent loan for |
| federal loan may not be enough to cover all the | | | | undergraduate students. It is given to the parents of |
| expenses of the student and in that case, the student | | | | undergraduate students who are dependent and have |
| might have to take a private student loan to | | | | enrolled at least half time. This loan option requires the |
| supplement his needs. It has to be remembered that, | | | | applicant to be free from any adverse credit |
| certain fees are deducted from the federal student | | | | experiences like the bankruptcy, default etc on their |
| loan amount, which means the student will not get the | | | | credit record. These loans are offered at a fixed |
| full loan amount applied for and should only take the | | | | interest rate that is higher than the Stafford loan rate |
| actual amount into account while preparing the budget. | | | | and also the repayment starts when the student is |
| There are different kinds of federal direct student | | | | studying in the school. |
| loans from different institutions. Hence, it is advised to | | | | To get a federal student loan, the student should |
| take the guidance of the parents or from other | | | | complete the FAFSA (free application for federal |
| financial aiding sources to decide on the type of | | | | student aid) and submit the same. |
| federal direct student loan to suit the student the best. | | | | Tips to make the process easier: |
| Perkins loan option: | | | | Before filling up the FAFSA form, the student has to |
| This loan can be availed by needy undergraduates and | | | | be very organized and should have gathered all the |
| graduates, which is availed by them at a fixed lower | | | | necessary information to fill the form. It is very |
| interest rate of five percent. The funds are dispersed | | | | important to apply much earlier than the closing date |
| by the school, making it very easier to get the amount | | | | for the application, to avoid any last minute trouble or |
| as soon as the student gets enrolled, rather than | | | | avalanche. While filling up the form, one needs to be |
| waiting half time to be eligible in the case of other | | | | very patient and should allocate enough time. It takes |
| federal loans. | | | | an hour to complete the application normally. |