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Federal Student Loans

There are loan programs available for students seeking both undergraduate and graduate degrees, and by definition must be repaid. Understanding the different types of loans and the specifics of each is crucial when deciding to include this in your “paying for college strategy”. Below is an overview of the Federal Loans that are available:

Federal Perkins Loan:
The Federal Perkins Loan program provides low interest loans to help needy students finance the cost of college. This is a loan that must be repaid. Disbursement is made from the Federal Government directly to the participating institution. Need is calculated based on your EFC and the completion of the FAFSA form. The annual award limit for this loan is $5,500 annually for undergraduates. $8,000 annually for graduate students, with a maximum limit of $8,000. To read more about Federal Perkins loans visit  http://www2.ed.gov/programs/fpl/index.html

Subsidized Stafford Student Loan:
The Subsidized Stafford Student loan is for graduate and undergraduates who meet specific financial need criteria. This criterion is based on your EFC and the completion of the FAFSA form. This is a loan that must be repaid; however, this loan may be consolidated with new terms after graduation. With this loan, the Federal Government pays the interest on the loan while the student is in school and for a pre determined “ grace” period after graduation. $3,500-$8,500 is available on an annual basis. To learn more visit http://www.ed.gov/

Unsubsidized Stafford Student Loan:
The subsidized Stafford Student loan is for graduate and undergraduates who meet specific financial need criteria. This criterion is based on your EFC and the completion of the FAFSA form. This is a loan that must be repaid; however, this loan may be consolidated with new terms after graduation. Because this is an “unsubsidized loan” the borrower is responsible for the interest on the loan for the life of the loan. $9,500-$20,500 is available on an annual basis. To learn more visit http://www.ed.gov/

Parent Plus Loans:
These loans are subsidized loans for the parents of dependant students and for graduate/professional students. PLUS loans help pay for the education expenses up to the cost of attendance, minus all other financial assistance. Interest is charged during all periods with this loan. To learn more visit http://www2.ed.gov/offices/OSFAP/DirectLoan/parent.html