When a student or parent sets out to obtain a loan and/or financing a college education there are a many different sources they can go to in order to acquire the funding necessary. However, there are two different categories of loans which are either federal loans or private loans.

As for federal funding for college, in many cases it is much easier to get the financing if you fit the criteria set in place. By far, one of the most popular federal student loans is the Stafford loan. There are two types of Stafford loans which are the federal family educational loan and the William D. Ford federal direct loan. The process of obtaining a Stafford loan is through the student filling out a federal student aid application, then once approved they will sign a promissory note on the loan.

The only real difference between the two types of Stafford loans is where the actual funding is coming from. For a direct loan, the funds are coming directly from the federal government as for a FFEL loan, the funding comes from either a bank, credit union or another participating lender in the program.

There are also a couple more that should be mentioned in this article and those are the Parent PLUS and Perkins loans. First, the Parent PLUS loan is designed for parents in need of assistance for paying their child’s college fees. This loan basically will fill in any gaps that the parent needs in order to cover all the college expenses fully.

The Perkins loan is basically a student loan which can be applied for at the college or university financial aid office which usually has a very low interest rat, but has a maximum loan amount of around $4,000 each year for students. They are federal fund and can be added to other types of funding. There are late fees and fees for skipping payments on the Perkins loan as well.

These loans and more can all be inquired upon at your selected college or university.

Credit history may not be as necessary if it is necessary at all in obtaining these types of funding options. As opposed to federal student loan funding, there are many private lenders willing to provide assistance for college funding as well. However, if you so decide to take the private lender route for financing a student loan, it is important to remember that most will need a bit of a credit history from the potential debtor and will most likely require a co-signer on the loan if the student with not much credit history at all is attempting to obtain the financing.

Federal funding for college students who need the financing, as well as parents is very available for anyone who has a need for such funding and it would be a good idea to look at all the options available in order to compare interest rates, fees, and more as these student loans will be around for a while after college as some loans will begin the payment schedule immediately during college like the Parent PLUS. Other repayment schedules will begin after 6 months for Stafford loans and 9 months for Perkins. So it would be a good idea to get all this information first hand before making any quick decisions about your college student loans.

By: S. Michael Windsor

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Level T asked:


The interest rate on an unsubsidized Stafford student loan is 6.8%. How often does interest acculumate on such a loan? For example, if my loan is $5000, how do I calculate when and how much interest is capitalized onto the loan. Thank you for your help.

Jan M asked:


I got an offer to get a Stafford loan from First Financial Bank and Citi Credit. Can I get a Stafford loan from both of them, or am I only allowed one? I kinda need more money for college.

La8elleDame5ansMerci asked:


I am considering taking out a Stafford Loan to pay for my college classes this semester. Ideally, I would like to take out the loan and pay it off by the end of the semester. Does the Stafford Loan allow you pay on it before the loan enters repayment? Also, how badly does the interest rate affect the amount that I pay back if the loan isn’t paid off over the next 10 years but over the next 5 or 6 months?

stacies mom asked:


I am looking at my school’s list and the ones that are at the top are:

Wells Fargo
Bank of America
Salliemae
Chase/JP Morgan
Wachoiva
Citibank

How do I determine is the best lender? What numbers should I be looking at?

BTW, this is for a stafford loan of $5500.

Thanks in advance for the answers everyone!
I already bank with Bank of America, does that matter?

help 123 asked:


When I graduate I will have a stafford and perkins loan. Additionally I will take over responsibility for my parents plus loan. What is the best way to combine these loans?

College Kid asked:


I will be a Sophmore this coming year, and no one in my family is a credit worthy co signer, and I do not have any established credit. I have the Stafford Loan and that is it. Any help would be greatly appreciated. I do not want to drop out of college, but it’s looking like that is my only choice.