Government Student Loans

Government backed student loans are the most popular type of loan for college students. The reason they are so popular is because there are not only many options to choose from, but the amount of money you can borrow is usually higher than alternative loans from private institutions.

There are several types of government student loans available to students that are in need of financial aid. Stafford Loans continually to be the first and popular choice, followed by Federal Perkins Loans, and Direct PLUS loans. Each type of loan has its advantages and appeals to different categories of students. Contact your financial aid department at the University you are attending or plan to attend to get more information about these types of loans.

As stated before, a large advantage to federal backed government student loans is the options and flexibility they provide. The student can opt to pay for his/her loan while they are in school, or they may wait until after graduation to start paying off their loans. There are also subsidized and unsubsidized options that allow the student to defer interest (subsidized) while they are going to school.

The repayment options on a government based student loan are also attractive to graduating students. Many forbearance and economic hardship options exist. Depending on the financial status of the student, one can defer payment of their loans for an indefinite period of time (or at least when the financial situation becomes better).

As always the student should never borrow more than absolutely needed. These types of loans may be extremely attractive to new students because repayment can be deferred for a very long time, however you will eventually have to repay the loan. Government student loans are not dismissed if one declares bankruptcy, so use caution when deciding on the loan amount.