The world of student loans can get confusing. Students are needing to borrow more and more to keep up with the rising costs of higher education. There are all kinds of options and it may be difficult for students and parents to figure out where to start. There are Federal Stafford Loans, Federal PLUS Loans, and Private Student Loans.
Your first step to getting the money you need for college is to apply for Federal Stafford Loans. In general, they offer the best rates and most flexible terms. If you qualify, you should be able to get a lot of the money that you need to borrow for college. You should also fill out the Free Application for Federal Student Aid (FAFSA) to see if you qualify for other forms of aid. You may qualify for grants, work-study or other types of student aid.
If you can't get enough from Federal Stafford Loans or from the FAFSA, then your parents might consider helping you out with a Federal PLUS Loan. The PLUS loan offers great rates and payback options to parents putting their kids through college.
Many Private Student Loans are about the same as the Federal PLUS Loans. Sometimes you can find Private Student Loans with little or no fees. This can make them even cheaper than a Federal PLUS Loan. Be meticulous when choosing your lender. Sometimes a better interest rate comes with higher fees, which in the long run will cost you more. On the other hand, you might find a loan that will cost you less than a PLUS Loan.
Many people are turning to Private Student Loans for extra support through school. Students are running into school costing more than they could possibly get through a Federal program. Talk to your school advisor about financial aid options. There may be scholarships available that you can apply for. They can help give you direction when it comes to choosing what is best for you.
Be wary if they try to steer you toward one or two particular lenders. Check out a web site that offers Private Student Loans from multiple lenders. This way, you ensure that your decision wasn't influenced by any loyalties. The product you choose should be the one that best suits your needs. Not the needs of the advisor. This is not to say that advisors are necessarily swayed by any one company, just be smart about what company you choose. Check out all of your options before you make your decision. After all, taking out Private Student Loans is a big responsibility and your choice will be with you for years to come.
