Federal Student Loans

Federal Student Loans

1. Federal loan: The type of student loans everyone is most familiar with. It is specially made for undergraduate and graduate students. Actually, federal student loan is the Dept. of Educ's major type of self-help financial help to students. The loan is often referred to as the Stafford loans. They are grounded on a minute examination of a student's family income and costs and this is a standard formula for getting money for education to college student borrowers. Also, it is a cost-effective source of getting student loans. Stafford loans give low-interest and government guaranteed funds. The Stafford loan is divided into subsidized and unsubsidized. For the subsidized loan, the government covers the whole interest to begin repayment i.e. they disburse interest incurred in the course, in postponement and at the grace period prior to repayment starts and for the unsubsidized loan, the student should pay all the interest incurred, though they do no begin repaying until after the grace period. 2. Parent loans or federal PLUS Loan: Parent loans are the loans from financial institutions designed to the parents of the dependent students. The loan type is often for undergraduates and let the parents take a student loan on the part of their children. In addition, parents are asked to meet the eligibility demands of the lender. Also, the parents may contribute to their children future, and obtain a low-interest loan along with continuing tax relief. Besides, it lets parents borrow the whole cost of the children studies, comprising any grants and other financial aid given.