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Student Loan Chart Pros and Cons

Pros   Cons
· No Credit Checks
since the funds are guaranteed by the federal government, your credit report is not used in qualifying you for the loan: see qualification parameters
· Low Interest
federal student loans are fixed rate loans that remain fixed for the entire term of the loan; current rates are lower than most other financing options: view interest rates
· Flexible Repayment Plans
student loan payments do not have to be repaid until 180 days after you leave or graduate from school. The federal government offers flexible repayment plans that can fit your budget. You can even consolidate your federal loans into one, low repayment plan: view this recommended student loan consolidation center for information

 

Stafford Student
Loans

 

Student Financial Aid Center

 

Special Benefits
Through Our Partner

 

 

 

 

· Low Amount Limits
the biggest disadvantage of stafford loans is the limited loan amounts — only $3,500 for first-year students. Very small amounts considering the cost of education: see loan limits
· Requires Federal Filings
you must file the FAFSA form with the federal government in order to apply for stafford loans. The FAFSA filing is used by colleges to determine your financial aid award: see FAFSA file
· Multiple Borrowings
you have to file and apply for a loan each academic year.
· Limited Use of Funds
your stafford loan is processed by your college to pay tuition, books, and housing. You cannot use your loan to pay other education-related expenses.
Pros   Cons
· Pays the Entire Cost
parents can borrow up to the total cost of education minus any financial aid received by the student: see product information
· Now Available for Graduates and Professionals
graduates and professional students can borrow on their own behalf up to the total cost of education minus any financial aid received: see product information
· Low Interest
federal PLUS loans are fixed rate loans that remain fixed for the entire term of the loan; current PLUS loan rates are about the same as most other financing options: view interest rates
· Flexible Repayment Plans
The federal government offers flexible repayment plans that can fit your budget

for parents: loan payments begin 60 days after disbursements have been made to the school.

for graduates: payments are deferred until after graduation.

 

PLUS Loans

for parents
for graduate students
for professional students

 

Student Financial Aid Center

 

Special Benefits
Through Our Partner

 

 

· Loan Must be Repaid by the Borrower
the loan is underwritten for the parent or graduate; the parent or graduate is responsible for repaying the loan
· Requires Federal Filings
you must file the FAFSA form with the federal government in order to apply for PLUS loans: see FAFSA file
· Credit Check Required
in order to qualify for the loan, you must pass a credit check as set by the federal government
· Multiple Borrowings
you have to file and apply for a loan each academic year.
· Graduates Must Use Stafford Loans First
graduates and professional students must first apply for the annual loan maximum eligibility under the Federal Stafford Loan Program before applying for a Graduate/Professional PLUS loan.

This will give you many different loans that you will need to manage: use our loan tracking sheet to manage both stafford, PLUS and other loans.

Pros   Cons
· Fills the Gap
since the cost of college can be higher than most financial aid awards, private student loans are used to fill the gap between cost of education and financial aid received
· Quick Processing
unlike federal loans that are processed through the college, the processing and distribution of funds is through the student thus speeding up process time: see product information
· Availability of Funds
private student loans can be used for more education-related expenses such as personal computers and other related supplies
· No Federal Filing
you do not have to file forms with the federal government in order to apply for private student loans. Private student loans are perfect for students who need additional funds to close a gap or pay for additional study

 


Private Student
Loans

 

Student Financial Aid Center



· Credit Check Required
you must have a credit history and verifiable income in order to qualify for this loan; since many students do not meet these qualifying parameters, a co-applicant may be required on the application
· Higher Interest Rates
private student loans have a higher interest rate than federal student loans: see product terms and rates
· Multiple Borrowings
you have to file and apply for a loan each academic year.
Pros   Cons
· Total Independence
you do not need to file federal forms or work through the college processing systems; you simply use your home equity credit line to pay all related college expenses (up to your assigned credit limit): view product information
· Low Interest Rate
depending on your LTV position, your interest rate can be as low as the PRIME rate or lower: see home equity rates
·

Flexible Repayment Plans
you can use your equity line to draw upon funds as needed while the student is attending school. By depositing your income into the equity line account, you can repay the borrowed funds at minimal cost: see illustration

· One-Time Application
you only apply once for your home equity line; you can draw upon available funds anytime you need money regardless of student's time in school
· Use Funds for Anything
you can use your home equity for any expense; you are not restricted on use of funds

 


Home Equity
Credit Lines

 

Student Financial Aid Center

 

· Credit Check Required
you must have a credit history and verifiable income in order to qualify for this loan. You must also have enough equity value in your home to secure your loan: calculate your LTV value
· Home Is Your Security
your home equity is secured by the equity value of your home; you could potentially lose your home if you default on your loan payments
· Rate May Be Higher
depending on your LTV position and amount borrowed, your interest rate may be slightly higher than PLUS loan rates:
· Funds May Be Limited
the amount you can borrow depends on your LTV value of your home; if your equity value if low, you may not have enough borrowing funds to pay for college expenses: calculate your LTV value

Student Loan Application

financial aid charts

Private Student Loans