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Student Loans

In these challenging economic times, more students are looking to alternative sources of income to fund their education, including student loans. There are many types of loans available and each can impact your financial future, so make sure to learn about what kind of loan you are receiving and the terms of payback.

The most common student loans available through the federal student loan program are Federal Stafford loans, which are fixed-rate loans for both undergraduates and graduate students. The current interest rate on loans is 6.8 percent or lower, and there are no payments while the student is still in school at least half-time. A fixed rate means the interest rate cannot change as students begin repaying the money.

There are two kinds of Stafford loans – subsidized and unsubsidized. Subsized loans are given out based on financial need of the applicant, and the federal government pays interest on the loans before the student begins repayment or during times of deferment. Unsubsidized loans are the exact opposite, whereby any eligible student can earn this type of loan, and interest is charged from the time the loan is disbursed until it is repaid.

The amount of money a student can borrow is based on the grade level and student status. In other words, if students are independently paying for college without familial assistance, they are eligible to borrow more. Standard repayment times for Stafford loans are 10 years, and there are various ways to repay the money, including fixed payments and graduated payments that increase as time goes on.

Defaulted student loans will negatively impact someone’s credit score, and thus their ability to borrow money in the future. Other negative consequences for defaulting on student loans include having wages garnished, withholding of Federal Income Taxes, and losing eligibility to obtain other loans. There are, of course, options to repay defaulted loans.

To learn more about student loans, visit or

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