Posted on Wednesday, 25th August 2010 by admin
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We all know that with inflation on the rise and expenses increased; more or less day to day things are becoming unaffordable. When talking about universities and colleges for higher education, their fees is said to increase twice the rate each year. There are many students out there who want to gain higher education and are very capable but due to the high amount of fees they are unable to do so. Fortunately, there are financial aid programs that can help them receive better education.
Types of financial aid
Financial aid is a great option for those who want to receive higher education but are stopped due to the high incurring fees of the institutions. It is the biggest wish of parents and students to get scholarships where there is no repayment but that of course is not availed by everyone. Therefore, for the financial aid purpose, there are many student loans available that vary in repayment terms, interest rates etc. Following are the basic sources of student loans:
1) Federal loans
2) Parent loans
3) Private loans
4) Other loans
5) State aid loans
6) Institutional assistance
Federal loans
There are nearly seventy percent of financial aid programs by the US Department of Education’s Federal Student Aid (FSA). They are available for both graduate and undergraduate programs in registered universities. This type of financial aid id given to the students and not to the parents and has to be paid back with interest rates.
One of the kinds of federal loans is the Stafford Loan that is long term with low interest rates. This has to be repaid with interest after the completion of education.
Another kind is the Federal Perkins loan that is a low interest government funded loan which has no interest applied when the student is studying and he has to start paying 9 months after his graduation with interest.
Parent loans
Parents’ loan is a type of financial aid that parents can take on their name for their child’s undergraduate degree. Parents can pay the fees for their dependent child through The Parent Loan for Undergraduate Students (PLUS).
Private loans
For students and parents who are unable to qualify for federal financial aid, for them there are other options available. Private loan is one such option for them. These loans come from private institutions such as banks and credit unions and they are not at all guaranteed by the government. Their repayment terms and interest rates all depend upon the lender.
Other loans
Other borrowing sources should also be looked for by students and parents such as a home equity loan.
State financial aid
This financial aid program is for state students who can contact their state on the higher education department and get financial aid from them.
Institutional assistance
Many institutions also have students to meet certain requirements and they give concessions and financial aid to students that are studying in their institutions.
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