The pursuit of higher education is not cheap. Many students must seek help in the form of student loans after exhausting all avenues for gift aid to help finance their tuition and fees. Student loans come in many forms and are offered by both public and private lending institutions. Of course, most students will gravitate towards state funded student loans as they offer more flexible repayment conditions and also qualifies graduates to get debt forgiveness under several volunteer schemes.

Public Loan Programs

• Stafford Loans: Stafford loans are the most popular type of public student loans offered to students. These loans come in both subsidized and unsubsidized formats. This means you can access Stafford student loans even if you do not have financial need for assistance in paying your tuition fees. The amount of the loan depends on your field of study as well as the number of years required to complete your studies. Students who opt for Stafford loans are guaranteed one low interest rate for the entire life span of their loan and have up to six months after their graduation as a grace period before they start repayment. One major plus with Stafford student loans is that they are not tied to credit approvals.
• Perkins Loans: Perkins student loans target only student with extraordinary financial need. Not all students will qualify for Perkins loans as they have to prove their need before approval is granted. These loans are offered for education at both the graduate and undergraduate level. Although Perkins loans have lower annual and lifetime borrowing limits, they have significantly more flexible borrowing terms, lower interest rates and are free of origination fees. Interestingly, the government pays interest rates on these Perkins loans while the student is still enrolled in school.
• PLUS Loans: Plus loans are a supplement to the regular student loans. Both students and parents can access PLUS loans to fund whatever costs are not covered by the regular student loans. This allows them to have funding to pay all their higher education fees with minimal funds coming from their pockets. The catch to PLUS loans is that repayment begins a mere 60 days after disbursement and attract an interest rate ranging from 7.9 to 8.5 %. Qualification also requires a good credit record and the repayment options are quite limited.

Private Loan Programs

Generally, students are advised to access private student loans only if they have exhausted the federal student loan system. The fees charged by some private student loan providers are much higher than under the federal system. Some may advertise a zero fee service but ultimately roll these fees into the overall interest rate associated with the loan. Students who opt for private student loan funding are attracted by the ability to consolidate and reschedule their loans. Although they may achieve less monthly payments in the short run, they ultimately pay more interest rates on the same principal over the extended period of the loan service.