For most people, student loans are the first thing they think of when trying to figure out how to pay for college. Student loans offered by the federal government are a time-honored tradition. They allow thousands of people to pursue an education and improve their lives by providing low-interest financial aid. There are many different types of government student loans. However, all of them require the borrower to attend college at least part-time, and many require full-time attendance. In addition to government-sponsored student loans, there are private loans available at higher interest rates.
Federal Perkins Loans, which give borrowers up to $4,000 per year, are based upon financial need. Not all colleges and universities make these loans available, however. Repayment on these loans starts six months after the borrower has graduated, and must be paid off within ten years. One of the many advantages of a Federal Perkins Loan is that you don’t have to attend college at least part-time.
Federal Stafford Loans, also called Federal Family Education Loans, can be subsidized or not. If the government is paying the loan’s interest during the time you’re in school and for the first six months after graduation, the loan is subsidized. If the Stafford Loan is not subsidized, then you are responsible for the interest from the beginning. In this case, you can defer interest payments until graduation, when you begin to pay off the principal.
Students who are dependents of their parents are eligible to borrow up to $23,000. The annual amount you will be awarded rises from one year to the next. If you are not a dependent, you’re allowed to borrow a total of $46,000. Graduate students are allowed to borrow up to $18,500 per year to a total of $138,500. These loans must be repaid within 10 to 25 years. Stafford Loans are available from financial institutions or from the federal government directly.
The United States government is committed to improving the livelihood of its citizens. One of the ways it does so is by not only encouraging a college education, but by making such an education a real possibility for anyone who seeks it.
by Mometrix Test Preparation | Last Updated: April 8, 2019