Thinking of
borrowing to help pay some of your college cost? Check out the
two main types of student loans: Federal Perkins loans and
Federal Stafford loans.
Perkins Loan
A Perkins loan is offered to undergraduate and graduate
students who can show financial need. (You'll need to fill out
an application for financial aid.) The school you attend will
serve as your lender, although the loan is made with
government funds.
Perkins loans
allow you to borrow a maximum of $4,000 per year for
undergraduate study. You begin repaying the loan nine months
after you either graduate or leave school or your student
status drops below half-time. You may be able to pay the loan
back over as many as 10 years.
Stafford Loan
Stafford loan funds also come from the federal government,
though they reach you through a school or bank. Stafford loans
can be either subsidized or unsubsidized. A subsidized loan
comes with the promise that the government will pay the
interest while you're in school. An unsubsidized loan, which
can be yours even if you don't prove need, requires that you
pay all the interest from the time you get the money to the
day you pay it off.
Stafford loans
come in various sizes. You can borrow between $2,625 and
$10,500 each year that you are in school, depending on several
factors: what year of study you are in, whether or not you are
your parent's dependent, whether you're an undergraduate or
graduate student and on what other loans you or your parents
have.
Once you leave
school, drop below half-time enrollment or graduate, you'll
have six months to begin paying back the loan on a schedule
which is determined by how much you borrowed and how fast you
want to repay. In some cases, such as unemployment or more
schooling, you may be able to get your student loan payment
deferred.
Have question about federal
financial aid programs?
The US Department of Education publishes Funding
Your Education ,
which provides high school students with general information
about federal financial aid programs, including how to apply
to them. |