Whether you’re planning to begin your undergraduate career at the University of Alabama, pursuing a graduate degree from Samford University, or are setting your educational sights further away from home, chances are you don’t have the cash at hand to pay all of your tuition at once.
Obtaining an education is becoming more and more expensive, and students are continuing to turn to student loans to help them pay for tuition, books, and housing. The federal government offers several types of loans, usually with affordable rates.
While one of the benefits of a federal student loan is the lower-than-average interest rates, knowing which particular loan you are best suited for will allow you to obtain the lowest student loan interest rate possible.
Federal Stafford Loans: Students that demonstrate financial need may obtain a Subsidized Stafford Loan. “Subsidized” means the government will pay the interest on the loan while the student is in school. The loan is long-term and offers low interest rates. Stafford loans are also available to students who do not present a financial need or need funds in addition to other forms of financial aid. This is referred to as an Unsubsidized Stafford Loan, where the interest payments are the responsibility of the borrower.
Federal Plus Loans: Parents of half- to full-time undergraduate students may obtain this type of federal student loan. They are awarded based on the cost of attendance and their credit history. Parents may only obtain this loan to pay for the educational needs of a dependent student.
Federal Perkins Loan: These loans are for students with an extreme financial need. This is why the interest rates are very low for Perkins loans. However, there is a limited amount of funding available to be awarded, resulting in generally small loan amounts.
If you don’t qualify for a federal loan, private loans are also available. Birmingham Banking Rates allows you to compare and find the most affordable current student loan rates among lenders.
