Student Loans
How affordable is college really? The average cost of a state college comes to a total of $16,153 and the average cost of a private college comes to a total of  $36,036. The average household makes about $46,326 yearly. So how can a young adult coming out of high school be prepared to take on that financial cost? One way is through student loans.
Who qualifies for a student loan? Anyone is eligible to apply for a student loan. Different banks and loan institutes have different requirements that an applicant would need to meet. Some requirements would be that the applicant would need to be a high-school graduate or have a GED (general equivalency degree), and have a cosigner.
With different banks and loan institutes, there are many advantages and discounts that each offer, such as lower interest, deferred payment after finishing school, additional discounts when combined with other loans, no penalty for early pay off, and no application fees.
So how do you begin? Well first note that there are two types of student loans that can be applied for: government funded loans and local bank loans. Ways to start the search would be to look online and discover the advantages and requirements of what getting the loan would be. Another option would be going to a local bank that the applicant has relation to.
Government Loans
There are various types of government student loans. There are Stafford Loans which base their funding largely on the applicants need rather than creditworthiness. These loans have the benefits of low-interest rates and flexible payment options. To qualify for this type of loan an applicant would have to have a great amount of financial need.
Another government loan would be a Parent PLUS Loan. A notable benefit this provides is a low-interest rate that does not require collateral and specifically aids families who need the funding for their child’s education. The child would need to have at least half-time enrollment and parents would need to have a moderate financial credit score in order to qualify for this loan.
There is also the Perkins Loan, which is given to students who have great financial need. For an undergraduate, they offer up to $3,000 per year for a total of five years and for graduates they offer up to $5,000 per year for a total of six years. This loan is awarded by the college the applicant is going to attending. To qualify for this loan, there must be exceptional financial need and the applicants must apply for a Pell Grant.
A government loan is the easiest to apply for. They generally offer the lowest interest rates. However, because these loans are based on the applicant’s financial need, the amount of the loan has a financial cap.
Bank Loans
There are several basic types of bank student loans. One reliable type is Sallie Mae. Sallie Mae loans are funded by the bank and backed up by the government. The advantage of this loan is that repayment begins nine months after the applicant graduates from college. They offer low interest rates and very flexible repayment time frame.
A bank loan is a personal student loan from the bank. Along with Sallie Mae, some other notable banks that offer student loans are Discover and Citi. Requirements for a bank student loan include having good credit scores, moderate interest rates, and a fixed repayment plan. A bank loan may be difficult for an applicant who has low credit scores.
Education is expensive and student loans can have a big impact on what college a student can attend, what they study, personal debt loan, and how they plan to cover the expenses. It’s important to take time and consideration when looking for the right funding for education. Interest rate, deferment of payment, monthly payment, duration of the loan, the total amount to be borrowed, the ability to repay the loan, and any assisted repayment programs are all good things to consider.
~ Ashley Brugh