Types of Government Loans for College to Take Advantage of

Not all people can afford to go to college. Financial constraints may stop them from getting the degree that they want. But this does not have to be the case as there are several types of government loans for college that can help them complete their education and have a better chance of becoming successful in their chosen careers.

Government Loans for College Options

Government loans generally have lower interest rates compared to other types of loans. They also usually do not require credit check, though they have their own requirements and limit for the loan amount. Here are some of the most popular government loans that students, as well as parents may consider.

 1.  Stafford Loan. This type of loan is offered by the government to students who are going or wants to go to a college or university but need financial assistance. This can be used on top of a grant or scholarship. This is also beneficial for those whose personal resources are not enough to provide for the education. This loan can be subsidized or unsubsidized depending on the needs of the student. When a loan is subsidized, the government would pay for its interest. When a loan is unsubsidized, the student must pay for it. But the payment can usually be extended after graduation.

One of the best things about this type of government loans for college is that credit check is not required. Furthermore, the interest rate is very low compared to other loans. The maximum amount that a student can barrow was also increased to $20, 500 annually.

2. Graduate PLUS Loan. This type of loan can be used by graduate students to pay for all their school expenses. This includes the tuition, school supplies, laboratory fees and more. This is actually not from the government but from private lending institutions. However, it is guaranteed by the government so a cosigner is not needed. It has a fix interest rate, which is 7.9%. This is also available for students getting their graduate education online. That’s as long as the online school accepts financial aid. This requires credit check so the student must have good credit score to get this.

3. Perkins Loan. This type of loan is available for both college and graduate students. However, this is for those who are more in need. Students that have independent status usually have better chances of getting this loan. There are specific criteria for having an independent status. Some of them include being at least 24 years old by December 31 of the current year, the applicant is a parent or married on the day of application or became a foster child after turning 13. Perkins loan is given by the school using funds from the government with 5% interest rate. The loan must be paid back to the school before graduation. However, it can usually be adjusted up to 9 months after graduating.

4. Parent PLUS Loan. The government also offers loans for parents who need assistance in sending their children to college. However, credit check is required so those who apply for this must have good credit ratings. The advantage of getting this loan compared to other types of loan is its lower interest rate. Furthermore, payment is often flexible or adjustable.

5. Direct Loan Consolidation. Direct loan consolidation combines all student loans in one payment. The benefit of this is that it is more convenient to pay the loans because of a single payment schedule. The payment period is also extended with the monthly payment becoming lower. However, the interest rate becomes higher. Students who would like to consolidate their loans must contact the United States Department of Education.

With all the options of government loans for college available, students now have a better chance of getting the course that they want, as well as finishing their graduate studies. However, those who apply for any of these loans should make sure to pay on time. This will prevent additional fees, as well as bad credit ratings.

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