Going to college is a full-time job. Even if you are able to squeeze in some part-time work in between your studies, it's hard to find enough hours to completely pay off your bills. Fortunately, there are a number of loans available to help you pay off your living expenses until you get your degree.
The government offers a variety of loans through its financial aid program. The two most commons loans are the Stafford Loan and the Perkins Loan. Both loans can be used for living expenses. To qualify for a government student loan, you need to fill out a Free Application for Federal Student Aid. This form needs to be submitted each year between January 1 and June 30 of your current academic year. On this form, you list your family status, your school information, your expected income and your other sources of financial aid. This lets the government measure your aid eligibility.
The Stafford loan is your best best for a government loan. To qualify for a Stafford loan, you only need to be an eligible student enrolled at least half-time at an American school. The interest rate on the Stafford loan is 6.8 percent and begins the day after you take out your loan. If you showed a high enough financial need, you can qualify for a subsidized loan. With a subsidized loan, the government pays off some of your interest during your time at college. As of 2012, the subsidized rate is 3.4 percent, half the unsubsidized rate. After leaving school, you have a six-month grace period before you need to start making payments on your loan.
If you show a high need for government help, you qualify for a Perkins loan. This loan charges a lower interest rate than the Stafford loan and gives you a longer grace period to start making payments. The Perkins loan charges an interest rate of 5 percent per year, and the government pays the interest while you're in school. Once you leave school, you have a nine-month grace period before you need to start paying off your Perkins loan.
If your parents are helping you pay for college, they can apply for a PLUS Loan through FAFSA. To determine your eligibility for a PLUS Loan, the government looks at the estimated cost of one year at your school versus your other sources of aid. If some costs are still not covered, your parents can borrow up to this amount. The interest rate on the PLUS loan is 7.9 percent. Interest starts to accumulate immediately after your parents take out the loan. They will start payments as soon as the loan disburses, though they can request deferment under certain circumstances. Since the PLUS Loan is more expensive than the other FAFSA options, it should be used only after you've maxed out your other options.
Your government loans might not be enough to cover your living expenses. If you need more money, you can take out a private student loan from a bank. These loans are a little more difficult to get. Unless you have a great credit history, you'll need a friend or family member to sign off on your loan. These loans also charge a higher interest rate than government loans. After you take out a loan, you'll have six months to four years to start making payments to the bank. Your interest rate and payment schedule depend on your credit history and the calculation of your bank.
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