A loan is a type of “self-help” aid that lets you borrow money from the government, banks or other lending institutions. Since it’s “self-help” aid, it must be paid back with added interest. Loans can be awarded based on financial need (subsidized loans) or not on financial need (unsubsidized loans). Your loan eligibility will be determined after your grants, scholarships and Federal Work-Study program(s) have been considered. Know the borrowing basics and be sure to research your loan options carefully. Keep in mind there are student loans (which are generally long-term and have low interest), parent loans (for parents to help pay for college), alternative loans (from banks and lending institutions) and consolidation loans (which combine all your eligible student loans, for one easy payment with possible lower interest). Take note that federal student loans generally have the lowest interest rates and the greatest flexibility. Alternative loans are used to supplement federal loans and are closely based on your credit history. Also, remember to borrow conservatively, accepting only the amount of money you need. Loans can be a lot of help, but the more money you borrow, the more money you will have to pay back, with interest.
Unless otherwise indicated, these programs are available to both undergraduate and graduate students.
- Federal Perkins Loan
- Federal Stafford Loan Program
- Subsidized Loans* vs. Unsubsidized Loans
- Federal PLUS Loan Program (for parents** and for graduate and professional students***)
- Alternative Loans
* available to undergraduate students only
** available to parents of undergraduate students only
*** available to graduate students only
Every student loan program - including those funded by the federal or state government, colleges, or other organizations - has its own unique awarding and processing cycle. If a student plans to use funds from a student loan to pay a balance owed the college, but those funds are not received prior to the scheduled due date(s), it is the student's responsibility to work with the appropriate office at the college to make satisfactory arrangements.
While some colleges may agree to temporarily postpone due dates (sometimes for a fee) until funds are received, others might require that the student make a full or partial payment by the established due date. If, once received, the student loan funds are more than the remaining balance due to the college, the student may receive the excess funds to reimburse out-of-pocket expenses or to apply toward other education-related costs. Students who are uncertain of the college's policy regarding anticipated financial assistance should contact their Financial Aid Office for clarification.