Types of Student Loans
The student loan process is a very complicated financing process. Understanding who is legally responsible for the loan repayment is extremely important to know before signing the note. For undergraduate degrees the amount the student can actually borrow in their name is very limited.
To qualify for the federal student loans each year, you need to submit the FAFSA every year with your new financial information. No matter how financially strong your family is by just completing the FAFSA form the student will receive access to the Stafford Loan. The type of loans you will receive are determined by the cost of attendance (COA) of the college and the expected family contribution (EFC). This may vary by each school.
In your planning you may also want to plan on taking the federal student loans early. The federal student loans are the legal responsibility of the student. There is no financial recourse to the parents with the federal student loans. This is just one advantage. The other advantage is the federal student loans have better repayment and loan forgiveness options.
Private student loans work a little different. These loans can be in the student’s name but will normally need a co-signer. These loans also have a variable rate based on the co-signers credit score. Repayment options are very limited with private student loans. Some private student loans offer a release for the co-signer after a period of on-time payments.
The student loan video address:
- Types of student loans
- Federal vs. Private Student loans
- Long term planning
Understanding the best ways to finance your education requires knowledge of the student loan process. To get professional college financial aid help with the entire college funding process, please contact us. We can help you avoid common mistakes and maximize your tuition dollars.