Types of Student Loans

If you have to borrow money for college, try to follow the Rule of Thirds for college costs:

1/3 or more should be covered by parent & student savings

1/3 or more should be covered by grants & scholarships

1/3 or less should be covered by student loans    

Types of Student Loans

Private Loans: Usually have higher variable interest rates, less flexibility in repayment if you are having a financial hardship, typically you can borrow larger amounts.

Federal Loans: Usually have lower fixed interest rates, some have subsidized interest most students are eligible, repayment is flexible, and the amount you can borrow is limited.

-Perkins Loans: Subsidized, administered through school, based on financial need

-Direct Subsidized Loan: Subsidized, based on financial need

-Direct Unsubsidized Loan: Unsubsidized, available to everyone.

-PLUS Loans: Unsubsidized, for parents of undergraduates or graduate students.