If you are in college or planning on going to college, one of the first things that comes to mind is how you will pay for your education. When you are in school its “how will I pay for next quarter” or “mom and dad help!”. Student education loans can be a great way to help pay for college tuition and shouldn’t be something you avoid. I will map out some of the student education loans I think are best. Most of them are government funded and not private or alternative loans. These are not hand outs either. They need to be paid back with interest. When scholarships are not available this can be the best option open to you.
The categories of Student Education Loans
There are 4 major categories that make up education loans.
Student Loans: Perkins or Stafford loans that are federal loans given by the government for your education. When you fill out the FAFSA these are the first loans to be offered and funded.
Parent Loans: PLUS loans for parents with students in college. They can come at low interest rates depending on your parents credit and income. If your parents cosigned a loan they may have been eligible for this option.
Private Education Loans: also alternative student loans that are privately funded by non-profits and organizations/banks. These loans come at higher interest rates and often come at variable rates. The government does not set the interest for these loans so it is wise to shop around when deciding which one to go with.
Consolidated Loan – This is primarily for after you graduate. You can consolidate all of your loans into one lump sum. A monthly payment with the term extended from your initial loan.
Another type of loan worth mentioning is that of Peer to Peer loans. These loans are referred to as social lending, or person to person lending. Its a non-traditional form of lending and a lot harder to find. The benefits of Peer to Peer lending is that you can defer payments of principal and interest while you’re in school.
Worrying about student education loans?
The federal government sets the maximum interest rate that lenders can charge for federally guaranteed loans. Nothing prevents them from charging lower fees except for competition. So many companies will offer initial deals and low financing to get your feet wet. They are usually great deals for incoming freshman and will help you justify that glorious education of yours. I was pretty stressed out when I was forced to go the private loan route for my education. Now that I am a senior, and have done my research I am pretty relieved at the outcome of my student loan consolidation.
Get a Student Education Loan
Fill out the FAFSA and calculate the interest of your other loans. It is better to be prepared when the time comes for you pay them. There are a lot of tools out there to help you calculate your interest and analyze your payments. Look into it online. Now I have to finish my last paper. 10 pages to be exact. Your Student Education loan is well worth it, to stay in school and get a great job. Stick with it.
