Loans are money borrowed by the student and/or parent(s)/guardian(s) from the government, a bank or a credit union. Loans must be repaid and the interest rates and accrual process varies by the loan type. Two common loans that students receive are the Federal Perkins and the Federal Stafford Loans (Stafford loans can be unsubsidized or subsidized).
1. Federal Perkins Loan- provide a long-term, low interest rate to undergraduate and graduate students who demonstrate financial need.
- Students who are awarded these loans often need to officially accept the loan quickly or it will be offered to another student in financial need.
2. Unsubsidized Federal Stafford Loan- provides loans to students. Student is responsible for paying the interest while in school. If a student chooses not to pay the interest while in school, the interest will be added onto the principle amount.
3. Subsidized Federal Stafford Loan- provides loans to students who demonstrate financial need. The government pays the interest while loans are in deferment or while the student is still in school.