<p>you know how on the eFan they issue you loans like the federal stafford and PLUS loans, well where are these loans issued from: the government or a private lender?
response would be appreciated.</p>
<p>Loans Based on Financial Need:
- Federal government is the principal provider</p>
<p>Characteristics of Need-Based Loans:[ul]
[<em>] Low interest rates
–Perkins interest rate (5%)
–Stafford interest rate (6.8%); includes in-school, grace, and deferment
[</em>] Delayed Repayment; payments on the principal are not due until graduate school or after you leave college
[li] In-School Interest Subsidy; Government pays interest on the loan while you’re in school and during the grace period[/ul]</p>[/li]
<p>Types of Need-Based Loans:[ul]
[<em>] Perkins Loan (low interest, 5% loan for undergraduate and graduate students with financial need); school is the lender; made with govt. funds and school contributes a share; you repay the loan to the school
–You can borrow up to $4,000 for each year of undergraduate study (max amt. is $20K for the duration of your college studies)
– 9 month grace period
– Allowed up to 10 years to repay
More info on Perkins Loans: <a href=“http://www.studentaid.ed.gov/students/publications/student_guide/2003_2004/english/types-fedperkinsloan.htm[/url]”>http://www.studentaid.ed.gov/students/publications/student_guide/2003_2004/english/types-fedperkinsloan.htm</a>
[li] Subsidized Stafford Loan: FinAid Office (FAO) has you choose a lender from a provided list. Sponsored by the federal government. Interest rates in the 4-6% range.[/li][</em>] Subsidized Direct Loans: Works same way as Stafford loans except the federal government is now the supplier. Interest rates in the 4-6% range.[/ul]
----> They’re called subsidized loans because the government pays the interest that accrues while you’re in school.</p>
<p>Non-Need-Based Loans:[ul]
[li] Used to help families that can’t afford the EFC[/ul]</p>[/li]
<p>Features:[ul]
[<em>] Higher interest rates than need-based loans
[</em>] have no in-school interest subsidy
[li] may require immediate repayal of principal[/ul]</p>[/li]
<p>Types:[ul]
[<em>] Unsubsidized Stafford or Direct Loans
[</em>] PLUS loans - parent loans, sponsored by the fed. government. Parents can borrow up to the total cost of education. Repayment begins 60 days after money is paid to the college.
[<em>] Grad PLUS Loans - student loans for graduate students sponsored by the fed govert that is unrelated to need
[</em>] Private or Alternative Loans (self-explanatory)[/ul]</p>
<p>Comparing College Loans:[ul]
[<em>] Interest Rate - lower the rate, the less you pay
[</em>] Subsidized or Unsubsidized - Sub. (Govt pays the interest on the loan while you’re in school.) Always borrow a subsidized loan first.
[<em>] Fees - loans have processing fees. You may borrow 2500 but only get 2400 because it took 100 to process it.
[</em>] Repayment plans - incentives such as interest rate reductions for on-time repayments (keep an eye on this)[/ul]</p>
<p>Least Expensive Loan (from top to bottom)[ul]
[<em>] Perkins
[</em>] Subsidized Stafford/Direct
[<em>] Unsubsidized Stafford/Direct
[</em>] Private[/ul]</p>
<hr>
<p>Other:</p>
<p>You don’t have to borrow the entire amount shown in your aid letter. (Find ways to save.)</p>
<p>Student Loan Repayment Calculator:
<a href=“http://apps.collegeboard.com/fincalc/sla.jsp[/url]”>http://apps.collegeboard.com/fincalc/sla.jsp</a></p>
<p>10 Essential Borrow Tips:
<a href=“College Board - SAT, AP, College Search and Admission Tools”>College Board - SAT, AP, College Search and Admission Tools;
[<em>] Loan consolidation: Loan consolidation means combining outstanding loans into a single loan with one monthly payment. You will have more time to pay off debt, but in all likelihood, the total cost will be higher.
[</em>] Deferment: This is a period during which payments are not required on a loan. For example, you can receive a deferment while enrolled in graduate school, serving in the military, or involved in the Peace Corps or other public service programs.
[<em>] Forbearance: This provision allows you to temporarily stop loan payments because of financial hardship.
[</em>] Cancellation: Some programs allow borrowers to “work off” loans by teaching in low-income areas or areas with teacher shortages.[/ul]</p>
<p>I know I’m not answering your question directly but I felt I should just post this since I was condensing information from College Board’s website about loans this morning and I felt I should just paste the entire thing for those who might be curious.</p>
<p>I was skimming and I thought you wrote all that, until I got to the bottom. </p>
<p>I was very impressed.</p>
<p>:rolleyes:</p>
<p>thanks emmeline.
Least Expensive Loan (from top to bottom)</p>
<pre><code>* Perkins
- Subsidized Stafford/Direct
- Unsubsidized Stafford/Direct
- Private
</code></pre>
<p>-what about PLUS?</p>