Student Loans: An Overview

If you’ve read the news lately, you know money is tight. The economy’s not looking good, a lot of people have lost their savings and, not surprisingly, debt is rising. Further, banks are reluctant to loan out money. If you’re currently in school or looking to matriculate, you may be at a loss as to how to pay for your education.

But fear not: You still have many resources at your fingertips. Read on for details about everything from what kinds of loans are available to what you should do if you have existing payments.

If You Need a Loan

According to, a public service site, there are three main types of academic loans: federal student loans, parent loans and private student loans.

Federal student loans typically have low interest rates and don’t involve credit checks. There are two types of federal loans: Stafford and Perkins. Stafford Loans can be either subsidized, meaning the government pays the interest while the student is in school, or unsubsidized, meaning the student pays the interest, which may or may not be deferrable. Interest in 2008-09 is set at 6 percent, but it gets progressively lower through 2012. (For example, rates for 2009-2010 are set at 5.6 percent.)

According to, about two-thirds of subsidized Stafford Loans are given to students from families with household incomes of less than $50,000. You can read more about them here.

Perkins Loans are similar to Stafford Loans but are…



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