Student Loans (A Four Part Series) - Part One: Types of Student Loans

Our First Guest!

Great news! We had our first guest on the podcast: Jodi Kaus, JD, CTFA, and Director of Powercat Financial. She is somewhat of a student loan genius, so there was no one better we could have had on the show! This week's topic was types of student loans, the 1st of our 4 part series on Student Loans.

Student loans are money that the government or a bank loans someone to pay for educational expenses. Some educational expenses may be tuition & fees, room & board, books, supplies, transportation.

Federal Loans

Federal Loans = From the government

  • Not credit based

  • Based on student financial position and position in school

Types of Federal Loans (Accessed through FAFSA)

Subsidized = Need based loan

  • The government pays the interest while the student is in college, with a six month grace period after graduation

  • TAKE THIS LOAN AS YOUR FIRST OPTION

Unsubsidized =Not need based

  • Anyone can receive this one, interest begins when the loan is given out

Parent PLUS = Under the parent's name, credit, and Social Security Number

  • Can NEVER be transferred to the student

  • Has higher interest rate

Graduate PLUS = For graduate students

  • Loan option for graduate students with a slightly higher interest rate

Details about potential loan amounts, types, and availability can be found at http://www.k-state.edu/sfa/ or the Office of Student Financial Assistance at your own university.

Private Loan

Private Loans = From banks or financial institutions

  • Credit-based

  • May or may not be better interest rate, depending on your credit score

  • Don't have perks of Fed Loans, like loan forgiveness

PRIVATE LOANS SHOULD BE YOUR LAST RESORT

What Next?

"Money Tip of the Week"

Pay off the interest on your unsubsidized loans before your grace period ends! If not, it will get added to the total amount of your loan.

Three Main Takeaways

1. Where can you get loans?

  • Federal or Private

2. What to look for when deciding?

  • Interest rate, grace period, deferment

3. Use your on-campus services to help you with the loan process