Choosing the right college loan(s) will help students finance their education and avoid a bad experience when repayment becomes due. Failure to understand the rules and the options, on the other hand, can lead to unpleasant surprises and serious financial difficulties.
Student loans are separated into two categories; subsidized and unsubsidized. The chief difference between the categories is who is responsible for the interest during the time a student is actively enrolled in a college or university.
Subsidized student loans are limited to students who demonstrate financial need: students whose incomes are not sufficient to meet college costs. There is a fixed limit on the subsidized loan money students may borrow, but the government pays the interest on such loans while students are enrolled in college and during the first six months thereafter.
Unsubsidized loans require no financial need; everyone is eligible to apply for them, and they are available in larger amounts than are subsidized loans. However, students are responsible for the interest payments, thus the term "unsubsidized"..
In most cases, students who qualify for unsubsidized loans need the maximum they are allowed to borrow. If they require funds beyond the subsidized loan maximum, they may turn to unsubsidized loans for additional assistance.
Students can apply for the Stafford Loan or the Perkins Loan. Neither has to be repaid while students remain in college.
There is also the PLUS loan, which can be taken out by parents. The PLUS loan offers a relatively low interest rate, but requires repayment to begin sixty days after the loan is awarded.
Student loans must be repaid. Even bankruptcy does cancel repayment obligation. Lenders will almost always work with folks having financial problems if they are making a genuine effort to repay their loans. However, those who attempt to avoid repayment face wage garnishment, the withholding of income tax refunds, and other serious penalties.
Students and their families should not fear student loans. They are a great way to help people get the education they need to have a meaningful career and earn far more than they would with only a high school diploma. But, it pays to shop for and fully understand your options and to avoid borrowing more tahn you really need. - 16752
Student loans are separated into two categories; subsidized and unsubsidized. The chief difference between the categories is who is responsible for the interest during the time a student is actively enrolled in a college or university.
Subsidized student loans are limited to students who demonstrate financial need: students whose incomes are not sufficient to meet college costs. There is a fixed limit on the subsidized loan money students may borrow, but the government pays the interest on such loans while students are enrolled in college and during the first six months thereafter.
Unsubsidized loans require no financial need; everyone is eligible to apply for them, and they are available in larger amounts than are subsidized loans. However, students are responsible for the interest payments, thus the term "unsubsidized"..
In most cases, students who qualify for unsubsidized loans need the maximum they are allowed to borrow. If they require funds beyond the subsidized loan maximum, they may turn to unsubsidized loans for additional assistance.
Students can apply for the Stafford Loan or the Perkins Loan. Neither has to be repaid while students remain in college.
There is also the PLUS loan, which can be taken out by parents. The PLUS loan offers a relatively low interest rate, but requires repayment to begin sixty days after the loan is awarded.
Student loans must be repaid. Even bankruptcy does cancel repayment obligation. Lenders will almost always work with folks having financial problems if they are making a genuine effort to repay their loans. However, those who attempt to avoid repayment face wage garnishment, the withholding of income tax refunds, and other serious penalties.
Students and their families should not fear student loans. They are a great way to help people get the education they need to have a meaningful career and earn far more than they would with only a high school diploma. But, it pays to shop for and fully understand your options and to avoid borrowing more tahn you really need. - 16752
About the Author:
Janet Madden is the Director of Guidance at a large, urban high school. In addition to working with high school students, she advises adults in her school's evening programs on online colleges and accredited online degree programs.
