Education does come with a hefty price at times. And although quite a bit of it can be paid off through student grants and scholarships, many times the necessity for a student loan is apparent. There are two types of loans a student can avail to pay for their tuition – federal student loans and private student loans. In this article, we tell you how to pay for college with the help of these student loans.

Federal student loans
As per the name, these loans can be availed by students from the government and they come in three types. Direct subsidized loans, which are given as per the student’s financial needs and are not charged interest upon while the student is still in school. The direct unsubsidized loans, the amount for which is decided by the educational institution, and interest is charged at all times. Lastly, the direct plus loans, which are given to graduate students and parents of needy students based on credit. These loans are charged interest upon during all periods.

Federal student loans are generally more flexible in terms of repayment and distribution of the loan. Some of them even allow repayment based on the salary of the student which makes them extremely student friendly and they also do not give too much importance to the student’s credit history while distributing the loans.

Federal student loans can be applied online by filling up the Free Application For Federal Students Aid (FAFSA) form which is absolutely free of cost. The FAFSA form needs to be applied to every year while the student is in college for receiving these loans.

Private student loans
Since federal loans do not always cover the full cost of education, private loans become necessary. The most basic difference between private and federal loans is that the former concentrates on your credit history while distributing the loan and also while deciding the interest rate. Some private student loans can be applied for even by a parent or a guardian of the student. Almost every educational institution has their own ‘lender list’ which is a good place to start looking for private student loans.

Please ensure that you go through all the details of a loan, whether private or federal, before applying for it. In case of private loans, make sure to not loan more than you need, and in case of federal loans, consider the payment option that will reduce the interest you pay. We hope this article has given you a better insight into how to pay for college with loans.