Education Loans - What You Need to Know

Education loans serve as a true blessing for numerous students and their parents. With the continually rising costs of a four-year college degree, it can now equate to the price of a new car or even a house in certain regions of the country. Education loans are not solely for high-achieving individuals who require minimal assistance or an additional source of funding. They often serve as the primary means of financial support, determining whether many students can pursue higher education. There are various avenues through which you can secure a college loan. Here are the four primary sources for obtaining such loans:

Federal Loans: These loans come in two types: need-based (such as the Stafford Loan) and non-need-based (like the Federal Plus Loan). Federal loans are highly recommended due to their affordable nature, featuring low interest rates, deductions, and discounts. They remain one of the most economical options for education loans.

I highly recommend considering government student loans, as they assist numerous financially needy students each year who would otherwise struggle to complete their degree programs. Examples abound of students benefiting from Federal Education Loans, including those with a sole surviving parent who receive funds to complete college, students with aging parents who are granted loans to continue their education, and independent students who rely on government funds to navigate the financial demands of college, thus preventing obstacles to their educational pursuits.

Private Loans: These education loans cater to students attending private K-12 schools or private colleges. Private student loans can either replace or supplement federal aid. They typically offer deferred interest options while students are still in school, flexible repayment plans, and straightforward application processes. Considering these advantages, private education loans may prove viable for certain students and parents.

Teen Esteem Loans: This loan program was initiated by the Teen Esteem Foundation to combat teenage drug abuse, pregnancy, and suicide. The loans are provided by prominent lending institutions that prioritize active and compassionate support for families, offering a user-friendly financial aid process.

Consolidation Loans: These loans are available after college and help borrowers/graduates reduce their monthly payments by combining all educational loans into one loan from a single institution. Moreover, for those who have already consolidated their loans, certain lenders allow borrowers to refinance the loan bundle at the most current and affordable interest rates. Don't hesitate to inquire about this option!

Once you grasp the numbers, percentages, statistics, and requirements associated with education loans, and once you have identified the most advantageous option, it is essential to ask as many questions as needed before signing any agreements. Additionally, while you navigate the numerous application forms, be prepared to complete scholarship applications as well!