College Student Loans

Introduction to College Student Loans
The government, banks, and other financial institutions provide financial assistance to students in the form of student loans. College student loans help pay for college tuition, books, other study materials, and living expenditures. College student loans have low Annual Percentage Rates (APR) and flexible repayment terms. College student loans provide a good source of funding when other forms of financial aid have been exhausted, and can allow financially needy students and families to cover the costs of attending college.

Types of College Student Loans
Some of the most common student loans include:

• Unsubsidized Stafford Loans
• Subsidized Stafford Loans
• Parent PLUS Student Loans
• Private Student Loans

Out of loans above, Subsidized Stafford Loans have the lowest current interest rate, which is fixed at 3.4%, and are the most favorable loan, as the government pays any interest accrued while the student is in school. The private lenders that offer college student loans include Citi, Sallie Mae, and SunTrust, among others. Lenders disburse private student loans as either Direct-to-Consumer loans or College-Channel loans. The checks for Direct-to-Consumer Loans are given to the borrower in which he/she can choose how to allocate the funds for school, while College-Channel loans are sent by the lender directly to the school, and the school will only use the funds for tuition.

Various Features of College Student Loans
Most private lenders require a cosigner for college student loans, but the federal student loans are considered college student loans with no cosigner required, as they are disbursed based on financial need and not credit worthiness. International students are eligible to receive a private student loan as long as they have a US citizen or a permanent resident cosigns the loan. Having a cosigner is advantageous, as your APR will most likely be lower if your cosigner has good credit. Usually most college student loans do not require you to begin repayment until after you have graduated, and they usually have a grace period that allows you find to a job and get settled. After you exhaust your free money and federal aid options, college student loans can be extremely helpful when paying for college.