Student Loan for College

By: EconomyWatch Content   Date: 25 November 2009

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Student loan for college is offered by both the federal government and private financial institutions. Being a welfare government, the US government makes sure that almost every aspiring student is getting a federal loan. However, this low-interest federal student loan is not sufficient for most college-going students. Private financial institutions also offer student loans at low interest rates. Both these types of loans have their own advantages and disadvantages.

Student Loan for College: Federal Loans

The largest source of funding for education in the US is federal student loans. You can apply either directly or through a reputable private financial institution. The terms of federal student loans are more favorable than private student loans. Federal loans are guaranteed by the government and the federal government sets the interest rates at very low levels. Irrespective of the credit score and other financial issues, almost all students are eligible for these loans. If there are no payments in due, federal student loans offer a grace period till after completing the studies. The most popular federal student loans are Federal Stafford loans, Federal Perkins loans, Federal Parent PLUS loans and Federal Graduate PLUS loans. If you are seeking loans for graduate and professional studies, you can supplement your Stafford Loan with the Graduate Plus loan before applying for any private loans.

Benefits of Private Student Loan for College

The difference between the real cost of education and the federal student loans can be filled by a private student loan. Private student loans are flexible, and can be applied for and obtained whenever the need arises. It just takes a few days to obtain a private student loan. Federal loans will not be disbursed until a particular time of month is reached. While the federal loan amount is fixed, a private loan can offer help if you need any additional amount to fund your expenses. While federal loans are need-based, private loans are non-need-based. That means, only those who can show considerable financial requirements can apply for a federal loan; whereas anyone can apply for a private student loan for college.


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