As you know from the first post in this series, loans are the only form of financial aid that needs to be repaid.
The federal government offers a few types of loans, known as Federal Direct Loans. These fall into the following categories:
1) Subsidized: These are loans to undergraduate students and are awarded based on financial need
2) Unsubsidized: These are loans to undergraduate students that are not need-based
3) PLUS: These are loans to parents of dependent undergraduate students
Your school might also participate in the Federal Perkins Loan Program, through which funds are awarded to students with exceptional financial need. In this program, the loan is made by the school rather than by the federal government.
You’ll be considered for Federal Direct Loans as a part of the review of your FAFSA, and you can take a look at more information here.
In addition to federal loans, there are private loans for which you might qualify. Private loans are made by a bank or credit union, and these institutions set the terms and conditions. Check with these institutions about their loan application processes.
Ideally your post-grad loan repayments should be only a small percentage of your salary, so don’t borrow more than you absolutely need; try to get as much as possible from grants, scholarships, and work-study, but know that these loans exist to help fill any gap left by the rest of your financial aid package.
We hope you’ve enjoyed our blog’s financial aid series and feel prepared to take your next steps to funding your college education!