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Posted:
By:
Bob Buckham
Website: www.best-choice-loans.com
College Loans: A must read for grants and loans
College loansthe doors to higher education for many students. Besides loans, there are also grants available to students based upon financial need which don’t need to be repaid.
At the end of this article, I will give you many sites for loans and grants. But first, let me introduce you to a few of the types of college loans and grants that are available for education financing.
The Federal Pell Grant is the largest grant program. It is available for the most needy students and currently has a maximum award of $2,340 per student. The federal Supplemental Opportunity Grant is also available to those who have exceptional financial need.
Besides the Federal Pell Grant, there are a number of other state and federal grants, including grants that many colleges offer to their own students.
With regards to college loans, there are two main loan programs that are based on financial need. They are the Federal Perkins Loan and the Federal Stafford Loan.
The Federal Perkins Loan is for undergraduate and graduate students, and the students borrow the money directly from the college. The interest rate is 9%, repayment begins 9 months after graduation, repayment is up to 10 years, there are no fees, and the maximum loan for an undergraduate is $3,000 per year, $5,000 for a graduate and $30,000 cumulative for all degrees.
The Federal Stafford Loan is the most widely used, and it has a subsidized and non-subsidized component based on financial need. With the subsidized program, the federal government pays the interest while you are in school. The interest rate is 8.25% (recalculated every July 1), a 3% origination fee plus a 1% guarantee deducted from the loan amount, loan limits ranging from $2,625 for 1st year students up to $10,000 for graduate students, and repayment begins 6 months after graduation with up to 10 years to repay the loan.
And finally, there is the Federal PLUS Loan for parents of undergraduate students. This is designed for parents who are paying for the student's education versus students who pay for their own education. There are a few differences. The interest rate is variable with a 9% cap (recalculated every July 1), a 3% origination fee plus a 1% guarantee deducted from the loan amount, the parent must be credit worthy, the full cost of the education can be borrowed minus other financial aid, and repayment begins 60 days after the loan is fully disbursed, and the parent has 10 years to repay the loan.
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