If you are a current college student, or student-to-be, federal student loans should be explored before private student loans. Only consider private loans once you’ve exhausted other financial aid options.
You should also consider looking into grants and scholarships. The beauty of these is they do not need to be paid back. A federal or private student loan do need to be paid back based on the terms of the loan.
Federal loans are funded by the U.S. Department of Education and typically have lower interest rates than private loans.
Direct Subsidized – a type of Stafford Loan for students with a financial need.
Direct Unsubsidized – This loan is similar to a subsidized loan, but is not a need based loan. You also will have to pay interest during periods when a subsidized loan interest is deferred. For this reason explore all subsidized options first.
Parent PLUS – Loans that can be taken out by the biological or adoptive parent of a student. Funds initially go to the school, and any remaining funds go to the parent.
A credit check will be performed for this type of loan to ensure no adverse credit history.
Grad PLUS – For graduate students attending school at least half-time.
While there are some specific requirement based on each loan type, there are also more general requirements every applicant must meet.