If you have been researching student loans, you know it can be very confusing to decide which type is right for you. Nobody looks forward to taking on debt, but it is important to make a smart decision when applying for student loans. Below is a quick summary of some of the most common student loans:
Federal Perkins Loans
A federal Perkins loan is a low-interest rate loan (fixed 5% interest rate) that is available to both undergraduates and graduates. To qualify for a Perkins loan, you must show significant financial need. The government provides the funds, but your university lends the money to the students directly. Interest is deferred while you are enrolled in school. Additionally, the Perkins loan program offers fairly generous forgiveness and cancellation options.
Federal Subsidized Stafford Loan
This is probably the most common student loan and they are available to undergraduate, graduate and professionsl students. A Stafford loan has a relatively low interest rate and interest does not accrue while you are enrolled in school.
Federal Unsubsidized Stafford Loan
Although this type of loan is widely available, your interest continues to accrue during the time you are enrolled in school or other periods of deferment. As a result, the amount you have to repay can be significantly more than the amount you actually borrowed by the time you graduate.
Federal Graduate PLUS Loans
This type of loan is only available to gradate and professional students. They typically have a higher interest rate than other federal loans and they often have origination fees tacked on. Additionally, these loans are unsubsidized and interest accrues during school enrollment and other deferment periods.
Federal Parent PLUS Loans
The Parent PLUS Loan is only available to parents to use to pay for their child’s education. They generally have high interest rates, origination fees and they are unsubsidized.
Private loans are typically your last resort for a student loan because they generally have high interest rates, costly origination fees, and very little flexibility for repayment plans.
If you have questions about student loans or how we can assist you with your student loan debt, please contact us for an appointment.
If you are considering filing for bankruptcy protection or you need assistance with your student loans, call DeLadurantey Law Office, LLC, at (414) 377-0518. We believe that each client should receive the individual attention necessary to reach their financial goals. Recognizing the needs of working clients, we maintain a flexible schedule and offer evening appointments. Initial consultations are always free, and phone inquiries are always welcomed. Find us on the Internet and on Facebook.