are-student-loans-becoming-necessary-evils

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					Are Student Loans Becoming Necessary Evils? When it comes to getting a college education most people can agree th at the costs can be staggering at best. Even the least expensive coll eges in the nation can add up over a four or five year period of time creating crippling debt for those who do not qualify for some of the better grant programs of substantial scholarships. The problem lies in the fact that the parents of most traditional col lege students make too much money to qualify for the free financial a id that is needs based and very few qualify for the limited number of scholarships that are available to students based on merit. Even amo ng those that qualify competition and fierce and there are no guarant ees. Enter the student loan. There are all kinds of student loans and unfortunately with rising costs associated with college attendence a nd the growing necessity of a college degree for success in this coun try it is becoming more and more difficult to pay the price that is a ssociated with higher education. There are three types of loans that are commonly found for college st udents. They include federal student loans, federal plus loans, and p rivate student loans. Each type of loan has advantages and disadvanta ges that are unique to that particular loan. Below I will give a litt le information about each of the loan types and whom they may benefit . Student loans. There are three different types of student loans: subs idized, unsubsidized, and Perkins loans. Perkins loans are only available to students who display exceptional financial need. These loans are available at a 5% interest rate and a re available to both graduate and undergraduate students. Perkins loa ns are extended through the university you attend and will be repaid to the university unlike the other types of student loans, which are repaid to the lending agency. Subsidized student loans are loans in which the interest is deferred until graduation or you cease to be a qualifying student. What this means is that while you are responsible for repaying the loan upon gr aduation the interest on these loans does not begin to accrue until y our begin repayment 6 months after graduation or your cease to be at least a half time student of the university. You must qualify based o n your income in order to receive a subsidized student loan. While th e needs requirements for these loans isn't as grave as those required in order to receive a Perkins loan you must still qualify. Unsubsidized student loans do not require qualification on a needs b asis. You must be a student and enrolled at least half time in order to receive an unsubsidized student loan. The good news however for

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those who do not qualify based on needs for other student loan optio ns is that this type of loan is available to all qualifying students regardless of need. The interest on these loans however begins to a ccrue immediately, which means they can really add up over time. PLUS loans are loans that are taken out by the parents of students who need the funds in order to cover educational expenses. The ma ximum amount that can be borrowed is the cost of attendence minus any financial aid awards the student has already received. The rep ayment on these loans begins 60 days after the loan is dispersed a nd the repayment period can be up to 10 years. In order to cover the costs involved in education that go above and b eyond what the government recognizes as acceptable college related ex penses you can opt to go the route of private student loans rather th en relying solely upon federal financial aid for your student loan so urce. These loans require that you qualify in order to receive them b ased on your credit rather than your need and must be used for educat ional purposes only. With these particular loans you really need to m ake sure you read all the fine print as different companies offer dif ferent conditions and different perks. You should really take the tim e and compare prices and options before taking out a private student loan and this should be done only as a last resort. Student loans for many can be the difference in attending college and getting the education you are hoping for and not being able to pay t he high costs that go along with higher education. For this reason yo u should treat them with respect and not take them lightly. PPPPP 740

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posted:12/16/2007
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