Student Loans
Different Types of Financial Aid
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When we say financial aid we don’t always mean money you’ll never need to pay back. Here are the different types of financial aid:
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Work-Study ( where you work on campus )
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Loans (what we will be speaking about today)
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Grants ( Federal financial assistant you do NOT have to pay back )
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Scholarships
Its important to always look deeper into a financial aid receipt give to you by a college. Financial aid packages are made up of ALL these components, therefore some may be offering you loans.
SHOULD I GET LOANS?
Pros of loans
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Can solve the prevention of not being able to attend college due to cost
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You can find loans you can pay back once you have fully graduated so you don’t have to worry about it while you are attending
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Payment after graduation can be very flexible to your income making it more affordable than in comparison to a private loan
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College loans have lower interest rates than private loans
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You do not need a co-signer or a credit score, it is fairly easy to be eligible for a loan
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Almost 65% of students in a 2019 study took out loans, therefore it’s common, you’re not alone
Cons of Loans
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Depending on your starting salary after college, it can be very expensive
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It sometimes means you start out life in debt
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Being late on payments with your student loans can negatively affect your credit score
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It Will be extremely hard to pay back if the degree is not pursued at the end of the student leaves college etc.
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WHAT ARE THE DIFFERENT TYPES OF LOANS?
In the grander scheme of it all, student loans have a substantial amount of both pros and cons. It’s important to see loans as an investment into your future, but you just have to be sure this future is what you want and it is attainable. Your situation with loans can also vary with what type of loan it is you get. These are the different types of loans and what they mean:
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Subsidized Loans
Subsidized loans are generally loans for undergraduates ONLY with low-interest rates offered to students to cover the financial need they did not get through scholarships and grants. This means if you didn’t get $8K covered through free aid, you can take out up to $8K. This loan is to be paid back 6 months after a student graduates from college.
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Unsubsidized loans
Subsidized loans are for both undergraduates and graduate students. These loans aren’t based on financial need, meaning you can take out really anything you’d like ( as long as it’s below the max which is $57K for undergraduates and $138K for graduates.) & you have to begin paying it back the minute the loan is taken. These loans also generally have higher interest rates.
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PLUS Loans
Plus stands for Parent Loan for Undergraduate Students. These are loans graduates or students of undergraduates can take out. These have generally high-interest rates and are only based on financial needs just like a subsidized loan. If your parent wants to begin paying this loan until AFTER graduation, there is deferment available. Deferment also allows your parent to begin paying this halfway through your college attendance. Here is the deferment request form:
Federal Deferment Request for Parent PLUS Loan
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