| Educational loans are meant for people who cannot | | | | these loans irrespective of their income status. The |
| afford education. They are a great way to complete | | | | interest for these loans can be paid while the |
| higher studies if limited by financial constraints. | | | | applicant is still in school or it can be held off until six |
| There are many kinds of education loans available | | | | months after graduation. |
| today. These can be classified based on the sponsor | | | | Federal loans or government education loans are also |
| (federal or private), according to the beneficiary | | | | available for parents. These are called PLUS (parent |
| (undergraduate, continuing education, insurance loans, | | | | loan for undergraduate students) loans. These are |
| parent loans, payment loans), or according to the | | | | insured by the government, hence they have lower |
| course of study, be it law school, medical school, | | | | rates of interest. Parents of undergraduate |
| dental school, MBA, general graduate, or post | | | | dependent children are eligible to receive these loans. |
| graduate. Another kind of loan is a career loans for | | | | There are several advantages with these loans. |
| people who are pursuing graduate or postgraduate | | | | Firstly, parents can borrow the total cost of college |
| education on a part-time to full time basis. This | | | | education (excluding any financial aid already |
| includes evening, weekend, distance learning, and | | | | received). Here, the interest rate is variable though |
| continuing education programs. | | | | there is an upper limit; the payback period starts 60 |
| Federal loans are those provided by the government. | | | | days after the college receives the money. Financial |
| These loans are offered at comparatively low rates | | | | need is not a necessary criteria for applying for these |
| of interest since the interest on these loans is paid | | | | loans, although certain credit guidelines have to be |
| by the government. Stafford loans are the most | | | | followed. |
| common federal loans. There are two kinds of | | | | Federal loans can also be consolidated- in the sense- |
| Stafford loans: subsidized, and unsubsidized. Subsidized | | | | separate federal loans can be combined into one. This |
| Stafford loans require proof of low income. Here, the | | | | would help to eliminate the hassle of paying more |
| interest is paid by the federal government while the | | | | loans. Since the repayment period can be extended, |
| applicant is in school at least half-time. Unsubsidized | | | | the monthly payment also decreases. Consolidation |
| Stafford loans, on the other hand, are those that do | | | | provides various options for repayment as well. |
| not require proof of income, as anyone is eligible for | | | | |