Student loans can come from two sources: the federal government or private lenders. There are a few federal loan programs, and you need to decide which one you want according to your financial needs. You can get a Federal Stafford Loan, a Federal Plus loan, a Federal Graduate plus Loan or a Federal Consolidation Loan.
The Federal Stafford Loan is available for most students because it does not require a credit check. One advantage of this loan as opposed to traditional loans is that it does not have to be repaid until after graduation. If the student drops out of school, of course, they will have to start repaying the loan. But in most cases, students finish their education without making a single repayment until after they graduate. The loans are backed up by the government, do they do not depend on the student’s credit, income or assets.
Another type of loan is the Federal Plus loan. Unlike the Stafford loan, this loan has to be made in the name of the parent. It depends on the credit of the parent, but not as much as traditional loans. The repayment of this loan can start only after it has been disbursed. A similar loan is the Federal Graduate Plus loan. It is almost the same, but it can be made in the name of the student. An extra criterion is that the student has to be eligible for a Federal Stafford Loan in order to apply for a Federal Graduate Plus loan, and they must be a graduate student.
The Federal Consolidation Loan can be used if a student has more than one loan and wants to consolidate them. It can help you pay off all of the loans, and you will be left with only one loan and one monthly payment.