Loans are available from both private and government sources.  Unlike grants and scholarships, loans must be repaid.  Federal and state loans might carry the lowest interest rate and repayment usually begins after you graduate. The most common government loans are:

Subsidized Stafford Loans

These are guaranteed by the federal government and are based on financial need. You will not be charged interest while you are in school or during the six-month grace period after your education ends before you begin to repay the loan. The interest rate is capped.

Unsubsidized Stafford Loans

These loans are not based on financial need. You are responsible for all of the interest that accrues on the loan including the time you are in school.

Private Student Loans or Alternative Education Loans

These loans are offered by private lenders with no federal forms to complete. Eligibility is based on your credit score. Private education loans tend to cost more than the education loans offered by the federal government, but are less expensive than credit card debt.

Graduate and Professional Student PLUS Loans

Graduate and professional students may borrow money through the PLUS Loan program to pay for their own education. This program operates in a similar fashion to the Parent PLUS Loan. However, graduate and professional students who are denied a PLUS loan because of an adverse credit history will not be eligible for increased Stafford Loan limits.

Be careful with student loans that are not guaranteed by the federal government or loans offered as “financial aid” at for-profit schools. Sometimes these loans are rolled into the admission/application process without your knowledge. You have a right to choose. Look for the lowest interest rate, confirm the loans come from a legitimate source, and always make sure you understand the contract you are entering into before you sign on the dotted line.

Your school may offer institutional grants and scholarships as well. These are usually based on need, merit, or a combination of both.  Check with your college for availability and filing deadlines.

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