| College financial aid for students attending college and | | | | programs: |
| graduate school can come from several sources, | | | | ---Stafford loans are available to students in two |
| including scholarship, grants, federal loans and private | | | | forms: for low-income students, who don't have to |
| loans. It can become a complicated labyrinth that isn't | | | | provide credit references, and for other students, |
| always easy to navigate. | | | | who do. |
| Most college planners urge students to tap out on | | | | ---Plus loans are low-interest loans taken out by |
| federal funding before turning to other sources, | | | | parents to help pay the difference between real |
| because financial loans tend to be less expensive in | | | | college costs and the amount of the student loan. |
| the long run. Unfortunately, because college tuition is | | | | Still, even with this loan tuition costs often exceed |
| so high today---and expected to continue to | | | | what the loans cover. |
| increase---federal loans many times only pay for a | | | | ---Consolidation loans allow parents and students to |
| portion of college costs. | | | | consolidate multiple loans into a single loan with one |
| And while scholarship and grant money are available, | | | | monthly payment. |
| the number of students who attend college on a full | | | | When students apply for a federal student loan, they |
| scholarship are few and far between. The smart | | | | fill out a Free Application for Federal Student Aid |
| thing to do when planning to pay for college if you | | | | (FAFSA), which automatically includes their |
| don't have a huge college fund at your disposal (most | | | | information for other programs, including scholarships, |
| people don't) is to apply for federal loans. Here's why: | | | | grants, or work programs provided by the federal |
| Federal student loans often have an interest rate | | | | and local governments. |
| that is far lower than private financial institutions, and | | | | Because financial loans are covering less and less a |
| also offer better and longer payment terms. | | | | percentage of college tuition, private financial loans |
| Usually, students don't have to start repaying the | | | | are becoming more popular. Unfortunately, as with |
| loan until after graduation, and sometimes can even | | | | any private loan, only those with the best credit |
| defer payment of an original loan if the student goes | | | | scores will receive the best rates. Private loans can |
| back to school for additional training. | | | | be expensive and most college planners urge parents |
| These federal loans don't pay for everything. The | | | | to exhaust other financing methods first. |
| most a four-year student can borrow is $10,500 per | | | | The best private loans have rates competitive with |
| year, which for some colleges is just a bite out of a | | | | the federal low-interest rates, about LIBOR +/- 2.0. |
| much bigger pie. For graduate programs, the loans | | | | Watch for lenders that offer a low rate while the |
| can go up to $20,500. What any particular student | | | | student is in school, then raise the rate when |
| receives is dependent on several factors, including | | | | payments are due. |
| the college of choice and in which year the student is. | | | | As with anything, shop around, do your research, and |
| Students can choose from three federal loan | | | | perhaps paying for college won't be such a nightmare. |