Student Loan

Many Americans rely on student loans when they need finance to complete their education. The basic criteria always remain a low interest rate and very little formalities to be completed. Following are three avenues that would meet most criteria.

Stafford Loan

The most important federal offer is the Stafford Loan, representing the largest component of the Federal Family Education Loan Program (FFELP). Under this program nearly $51 billion is provided for college education each year.

Highlights Of Stafford Loan

• The federal government offers to pay interest when a student hasn't completed his education. After that, a six-month grace period is given where it continues paying interest.
• If the student loan is unsubsidized, you pay interest. The payments could, however, be deferred to be paid after you graduate. Unsubsidized borrowings are offered to all students irrespective of their financial need.
• The loan has to be repaid normally over a period of 10 years, Alternate repayment terms could be arranged by consolidating loans.
• Subsidized borrowings are often consolidated with the unsubsidized amount, to borrow the maximum permissible amount.
• There are separate limits for the different category of students depending on whether you are an undergraduate, graduate, medical or any other professional student.

Parent Plus loans: This is provided to parents of undergraduate dependent students and is known as the Parent PLUS Loan. The total cost of a student's undergraduate education can be borrowed, provided financial aid has not been obtained from other sources. This is one of the most affordable ways of meeting educational expenses for parents. With a low interest rate of 8.5%, payments can be postponed for up to five years.

Private Student Loans: Many students opt for private funds when their borrowing requirements need to be supplemented by federal programs or if they are enrolled in school for less than half time. The choice here is with the borrower. Lenders offer a host of supplemental borrowing programs. You should apply for a loan as soon as you have received the acceptance letter from the school. Disbursement usually coincides with the date of enrollment and is decided by the aid officer of a school. Many programs are willing to lend, such as; Sallie Mae, American Student Assistance, Chase Bank, Wells Fargo, USA Funds, and several others.

Local banks are a good place to start when you are thinking of borrowing from a private lender. However, the choice is yours. Keep track of all the amendments to these programs. For example, Sallie Mae has announced in 2009 that it is discontinuing its private signature loan program. Overall, it has become very easy to get the desired student loan you are looking for.