Government Student Loans And Its Types

Government student loans should be the first choice you make in considering financial aid for you and your education planning. We discussed before that there are two types of student loans here and those being federal student loans and private student loans. The federal student loans are available to almost everyone for some type of assistance.

Another reason for looking at a government student loan is that they almost always have the lowest interest rate available. With that, the payment plans are very lenient and they have the most flexible terms. Most government student loans have no credit requirement and are guaranteed by the government as well.

These loans are also beneficial because the students can often have up to ten years to pay the loan back. This all depends on the total amount of monies that was borrowed to begin with.

Types of Government Student Loans

Federal Stafford Loan

The Federal Stafford Loan is available in two different types called a subsidized and unsubsidized.

A subsidized loan means that the federal government will pay for the interest on the loan that accrues. This type of loan is set-aside for those with the most need. Almost everyone can get a unsubsidized Stafford loan but keep in mind that you are still responsible for paying the monthly interest on the loan while you are still in school.

The Stafford Loan is the most common student loan type and has some of the lowest interest rates available

Federal Parent PLUS Loan

The Federal Parent PLUS Loan is to help out the parents of a college student and is a credit based, alternative type of loan. The amount your parents can borrow is up to the cost of the dependents education but does not include other financial aid. This loan starts getting paid back as soon as the entire amount has been given out.

Federal Perkins Loan

For those students who are in exceptional need, there is the Federal Perkins loan. This type of loan is available to both undergraduate and graduate students. Students are required to demonstrate a financial requirement in order to quality for these types of loans.

These government student loans are campus based and are given out annually. The campus will then give awards out to students who are approved for the Perkins loan but this is on a first come, first serve basis. Students will need to apply as early as possible for this loan.

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