Student Loans

A harsh reality of today’s world is that for most students a loan is necessary to get into college. Making the right decision when choosing how to finance your college tuition costs with a student loan can make a huge impact on your financial health for years if not decades after graduation.

Student Loan Articles:

The general rule for borrowing money is that you shouldn’t borrow more money for your entire education than you predict to make your first year out of college. This amount obviously varies based on your degree, e.g., is your degree in Computer Science, Engineering or Literature.

There are two basic types of loans: federal government provided or sponsored loans and private loans. Some of the most popular flavors of loans are Perkins, Stafford, Heal and PLUS loans, but don’t worry (Parent Loans for Undergraduate Students) are your parents responsibility.

Federal loans have better rates than private ones and are more lenient - offering a variety of repayment plans and even the chance to have some of your debt erased if your income is low. Private loans have higher interest rates that start around 8% and can go as high as 19%, in most cases they cannot be erased or forgiven.

There are two kinds of federal loans:

In a subsidized loan the government will pay the interest while you’re in school.

With an unsubsidized loan interest starts to occur as soon as you get the loan (although payment may not be due until graduation).

Perkins Loans: These are subsidized loans awarded to students with “exceptional financial need” and come with a fixed 5% interest rate. You are allowed to borrow up to 20k for undergrad work and another 20k for grad school.