Education Loans: The Basics
Everything you need to know to apply for an education loan is right here. We'll explain how education loans work, what the application process entails, and how they can help.For a step-by-step guide on applying for and selecting financial aid, see our "Financial Aid: Five Steps" page.
Education Loans: Need-Based vs. Non-Need-Based
Need-based aid is awarded based on your financial situation and that of your parents, if applicable. The Department of Education has a formula with which they determine financial aid according to the information you supply on the FAFSA. The variables in the formula include student income and assets, parent income and assets, number of people in your household, and the number of people in your family attending college/grad school. If you demonstrate financial need, you can qualify for education loans like Pell grants, Stafford loans, Perkins loans, and work-study programs.
With non-need-based aid, you can qualify for assistance regardless of your or your parents' incomes as long as you meet the requirements of the specific program. Merit-based scholarships are examples of this type of assistance, as are unsubsidized Stafford loans, credit-based education loans, PLUS loans for parents, and Grad PLUS loans for grad students. Private education loans are another non-need-based form of financial aid.
Education Loans: Subsidized and Unsubsidized
Education loans are loans that you will have to repay, plus interest. A plethora of education loans are available from the federal government, state government, and other institutions. Private education loans are also available to both parents and students, at the undergraduate and graduate levels. Some education loans are based on your credit, like private education loans, Federal Grad PLUS loans, and Federal PLUS loans. Other types of federal loans are non-credit-based and do not require a credit check to qualify. Education loans can be subsidized or unsubsidized. Here are brief explanations of each type:
- . Subsidized education loans: these loans are awarded on the basis of financial need. With a subsidized education loan, you will not be charged interest during the grace period, while you're in school at least half-time, or when you're in deferment. Perkins and Stafford loans are examples of this category.
- . Unsubsidized education loans: this means you will be held responsible for all interest charges for the life of the loan. You will be charged interest even during periods when you're not making payments on the loan for various reasons (grace period, forbearance, or deferment). Typically, unsubsidized education loans are not need-based.
As you can see, whatever your education loan needs, we can offer a product that meets them. To apply for any of these education loans, simply click on our "apply now" link, fill out the application, and you will be contacted by one of our representatives. The entire loan process can be completed online with our secure e-signature technology.
