Going to college is an exciting time in your life, but it can also be somewhat stressful when it comes to financing the included tuition costs, books, and other types of expenses. A great many prospective students aren’t applying to college these days just to avoid incurring debt. Just keep in mind that after you choose a graduate school there are several ways to come up with the funds you will need to pay for all your school related expenses. Contrary to public opinion, a college degree doesn’t necessarily equate debt.

There are a number of loans you can apply for that can help subsidize your tuition and other expenses. These include: Federal Stafford Loans; Federal Plus Loans; and Federal Perkins Loans.

Federal Stafford Loans

Subsidized Federal Stafford Loan: This is a long-term, low-interest rate loan that is provided to students on a need-basis.  The best part about obtaining this type of loan is the government pays any interest accruing on it while the student is in school.  Furthermore, if the student requests a deferment or an extended grace period, the government will continue to pay the interest.

Unsubsidized Stafford Loan: This type of loan is also long-term, but it is not provided to students on a need-basis; however, it is accompanied with a low-interest rate.  For those students who do not qualify for subsidized loans, unsubsidized loans are excellent types of funding to take advantage of.  Even though this type of loan does have a low-interest rate, it accrues the entire time the student is in debt on the loan.  At no time does the government pay for any of the interest that builds up.

Other Types of Unsubsidized Loans: For students that are classified as independent students, other types of unsubsidized loans are available. Sometimes these are regional or state-based. There are also loans that are based on minority status and/or disability. Any student looking for financial assistance for college should conduct extensive research about the loans he or she may be able to apply for.

Federal Plus Loans

For parents who want to obtain a school loan for their children in college, these types of loans are very beneficial.  The amount awarded in Federal Plus Loans is based on a student’s parent’s credit history, as well as the cost of attendance for the school the student wants to attend.  These types of loans are usually accompanied with a low-interest rate; however, the repayment period of the loan usually begins sixty to ninety days after the loan is fully disbursed, or in some circumstances, after the student graduates.

Federal Perkins Loans

Perkins loans are provided to students who can show an extreme financial need.  They are sometimes reserved for low-income families and special needs students, but anyone can hypothetically qualify for one. Perkins types of loans tend to be accompanied with extremely low interest rates, and the interest does not start accruing until about nine months after a student graduates or drops below half-time enrollment.  In most circumstances, the amount to be awarded is limited, meaning the total amount of loan is relatively low. However, for students looking to attend a community college or an e-campus, this could be just the amount needed to avoid debt.

As stated above, it’s important to do independent research before committing to any loan arrangement. As with any long term financial endeavor, you want to know what you’re getting into beforehand. You also want to make sure you’re taking full advantage of the federal and state subsidies that are out there. Many students bundle two or more loans together. In addition to a scholarship, this can reduce your tuition to something that is manageable.



Crystal Stemberger uses Budgeting in the Fun Stuff to write about finding the balance between paying your bills, saving for your future, and budgeting in the fun stuff along the way.