Paying for College

Learn More About Student Loans

Student Loans

If you have already checked into getting scholarships, grants, and other types of financial aid and you still need help paying for college, you may want to consider applying for a loan. A loan is an agreement to borrow money and repay it over time, with interest. Before filling out loan applications, learn about the different types of student loans.

Start out by looking at government loans.

  • Subsidized loans are given to students who have a demonstrated financial need. These loans are preferable, since the government pays the interest in the loan while you are in school, and offers some grace periods if you face financial hardship.
  • Unsubsidized loans aren’t based on your financial need. With these loans, you are responsible for paying the interest from day one. If you aren't likely to qualify for a needs-based loan or need money beyond what subsidized loans will offer, you may want to consider applying for an unsubsidized direct loan. This is preferable to a private loan for a number of reasons.
  • No credit check or collateral is required.
  • The interest rate is usually lower than that of private loans.
  • The interest rate is fixed, unlike private loans, which could change at any time.
  • There is no need for a co-signer.
  • It is usually easier to arrange for deferments and flexible repayment plans than it would be with a private loan.

Common government loans include:

  • Perkins loans are low-interest federal loans that are granted to students with a significant financial need.
  • Stafford loans are one of the most common federal student loans for U.S. citizens and other eligible non-citizens who are enrolled at least half time in an eligible degree or certificate program. They have a fixed interest rate.
  • State loans have varying interest rates. However, they are often preferable to private loans because they may offer additional benefits.
  • PLUS loans are used to cover expenses not met by other financial aid. They have a fixed interest rate so the monthly payments remain steady.

To apply for a government loan, you’ll need to complete the FAFSA (Free Application for Federal Student Aid).