Studying for college can be a massive expenditure if you aren't financially equipped. Tuition, accommodation, food, and several other activities that come with a college lifestyle can get overwhelmingly expensive for a parent. Thankfully, student loans can make it easier to get into the best colleges.
However, how do we know what's the best with so many options? Here are some student loan options that can make college expenditure slightly more bearable. Federal Student Loans These are some of the best and most popular options among parents and students. They are also the cheapest option available as opposed to several private student loan offers. There are four types of direct loans that are available to the borrowers.
  • Direct Subsidized Loans These are loans are given to students who need financial aid to cover the costs of education at a college or university. These are eligible for undergraduates.
  • Direct Unsubsidized Loans These are given to undergraduates, graduates, or even professional students. However, this type of loan eligibility does not depend on financial needs.
  • Direct PLUS Loans These loans are made on a credit check. It is available to graduates, professional students, and also to parents of dependent undergraduate students. The loan helps cover expenses that are usually not covered in other financial aid offers. Since a credit history check is done, those who have an adverse credit history should look into other options.
  • Direct Consolidation Loans As the name suggests, you can consolidate all your eligible federal student loans into one single loan provided by one service.
Each of these loans has eligibility criteria, so make sure to read the documents carefully when deciding which option would be best for you. Federal Student Loans Pros There are several pros to choosing federal student loans over private loans, and here are some of them.
  • The interest rates are fixed and are much lower than private loans or credit cards.
  • You only need to start paying back the loan once you have graduated or drop out below half-time.
  • The government sometimes pays interest on some loan types if you request more financial help. This requires some documents and eligibility criteria.
  • If you have trouble making payments, the repayment plans are flexible and can be managed.
  • If you start working for specific jobs, some portion of your student loan may be forgiven by the government, provided you meet the criteria.
  • For most federal student loans, you do not need a credit check or a co-signer for you to get the loan.
Private Student Loans While most people choose Federal Student Loan offers, they may not be enough to cover all the bills. For this purpose, you can take an additional private student loan. Depending on the kind of degree you are pursuing, you can ask for different types of loans, like community college or technical training, undergraduate school loans, graduate or professional school loans, and parent loans. Each has different criteria, so make sure to read the documents carefully. The criteria usually depend on your and your co-signer's credit score. This affects the type of loan you are eligible for and the interest rate on which you can get the student loan. Popular options There are several options available to students when it comes to financial aid, and some of the most popular choices for private student loans include College Ave, Earnest, Education Loan Finance, Sallie Mae, Ascent, SoFi, Citizens Bank, LendKey, Commonbond, and PNC. You may speak to your college about financial aid and scholarships and see what you are eligible for. If you are an exceptional student with a good GPA, you may get better scholarships and help. It is important to ensure the kind of student loan you are taking and how well you spend it, as you need to start paying it back as soon as you finish college.