College Loans

Written by Tara Peris
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College loans are among the most common ways to pay for higher education. With very competitive interest rates and reasonable deferment and repayment options, they can help to make tuition expenses much easier to manage. The key is to educate yourself about the financial aid process and to begin financial planning early so that you qualify for the most competitive packages.

When getting started, it is important to recognize that there are many kinds of college loans. Stafford Loans, for example, are direct loans in which the funding source is the U.S. Department of Education. By contrast, Perkins Loans come from individual schools; they rely on federal funds but are regulated differently. In order to get the most effective aid package, you've got to understand the implications of using different funding sources and loan terms.

Learning Curve

It's a tall order to initiate this self-guided tour of the financial aid process. It's made worse by the fact that most families put it all off until it must be squeezed in with college applications, SATs, and the like. Your best bet is to start preparing early. Often, schools will have financial aid information sessions to help get the ball rolling; however, be prepared to go above and beyond if you want the best deals.

It helps to begin on the federal websites. You'll also want to learn about the Free Application for Financial Student Aid (FAFSA), and how it works in the process--you will need to fill out this form to qualify for any federal money. These tools can get you started and you can use them to consult with a lender or financial aid specialist for further help.


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