When you are looking at college, the cost of a four year college degree can seem overwhelming. According to CollegeBoard.org, the average cost for a private college is $48,510. And costs for a public state university are currently averaging $37,430 a year.
Figuring out how to come up with the money for tuition and expenses takes planning. Exploring scholarship options early is one part of the process. Another option is to look into student loan programs.
To start with, there are two main types of student loan programs available. The first category to consider are those student loans that are backed by a public government program. And the second option are private lenders.
Student Loan Programs
These popular government loans are available as subsidized or unsubsidized loans. They are also available whether you qualify for financial aid or not.
You must be enrolled in school at least half time. Both undergraduate and graduate students are able to qualify for these loans.
The following are factors that impact how much you can borrow:
- Year in school
- Independent or dependent status
In addition, there are maximum limits in how much you can borrow.
One of the biggest attractions of this loan program is that payments are deferred until you either graduate or stop attending school.
This form of student loan is available to both students as well as parents. While these loans can help you to go to school without having to put up any funds initially, there are a few important points to note:
- Interest rates are likely to be higher than with some other options, so check carefully.
- There may be an origination fee to get this loan.
- Depending upon the terms you get, loan payments may start as soon as 60 days after receipt of funds.
Private Student Loans
Several financial institutions and banks have entered into the private student loan arena. Many of them offer substantially higher lending limits than government programs.
They offer repayment terms ranging from 5 to 15 years and both fixed or variable interest rates.
If you are thinking about this type of loan, it might be smart to comparison shop a few lenders. Not all lenders and loan terms are going to be the same.
It takes a little time to find the best student loans. Researching options and reviewing the terms is important. The financial aid office of your school might also offer some help if you have questions.
Want more help in finding financial aid for college? Download our free ebook, The Ultimate Scholarship Guide, here.