Are You Eligible for Higher Education Student Loans?

What are Higher Education Loans?

Students who are seeking college level education can pursue student loans for higher education. Student loans higher education are loans to cover the costs involved in pursuing a college level degree. Loans do not just apply to college tuition, but can sometimes be used to cover the cost of books, room and board, and meals while in college.

How Student Loans Differ from Other Funding Options

Some students pay for their college education through grants or scholarships. A scholarship is money given to a student due to some merit that they have achieved, usuall y for community service, grades, or athletics. Grants are money given to pay for education, but not based on merit. There is usually some sort of a clause in a grant specifying the course of education the person can take. For example, a potential medical student may receive a grant from a medical foundation, but in order to receive the money, they must pursue a degree in a certain field of medicine. Neither grants nor scholarships must be repaid.

Loans, on the other hand, must be repaid, with interest. Student loans for higher education are really borrowed funds. When the education is complete, the student must pay back their higher education student loans.

Types of Higher Education Loans

There are several types of higher education loans that students can apply for. Some are handled by the Federal government, while others are state higher education loans.

Federal Loans to Students

The Federal government offers a couple of loan options that are given directly to students. One of the se is the Federal Stafford Loan. Stafford Loans can be either subsidized, where the government pays part of the interest while you are in school, or unsubsidized, where the government pays nothing. Stafford Loans carry a fixed interest rate of 6.8%. Students who have used Stafford Loans for their undergraduate degree programs can then apply for Federal Graduate Plus loans, which are financing for graduate school programs.

The other Federal program is the Federal Perkins Loan. These loans are set at a 5% interest rate, and can apply to both undergraduate and graduate work. Students can borrow $4,000 each year for undergraduate schooling, and $6,000 for graduate school. The loan is actually made by the school, with help from the government. Students pay the school back for the cost of the loan, rather than the government.

Loans for Parents

While higher education and student loans seem to go hand in hand, many people do not realize that parents of potential students can also receive financing for their children's education. PLUS loans are loans parents can receive to pay for their children's college education, provided that the child is enrolled at leas in a part time status. Parents can borrow the entire cost of their child's education, minus any financial aid the child received. The funds are sent directly to the school, and can apply to room and board, tuition, fees, and any other charges for the schooling.

State Aid

While every state is different, several states offer student aid for students who live in their state, and also attend school there. Some states offer non-residents aid as well. This can be loans, as well as grants or scholarships.