The most important decision a student makes is when and where to obtain loans. When that decision is made in advance, the next most important decision will be how to apply for a loan.

Student loans

Graduation mortar board cap on one hundred dollar bills concept for the cost of a college and university education

Student loans are a form of financial aid, meaning they must be repaid. Some loans may require a co-signer, while others can be repaid on your own. Most schools will provide students with information about loans they qualify for as well as ways to apply for loans and how to pay them back.

The Federal Family Education Loan Program, also known as FFELP, provides loans to students, regardless of credit or income. The two types of loans are subsidized and unsubsidized loans.

Subsidized Loans – These loans offer lower interest rates than unsubsidized loans. Students must also have good credit to qualify for a subsidized loan.

Borrower Education Savings Plan, or BESP – This is an income-based loan that only requires good credit. The borrower pays a monthly payment instead of a percentage of his gross monthly income. Students with good credit must pay more for this type of loan.

Federal Direct Loans

Federal Direct Loans are required to be repaid by the borrower. There are several options to qualify for a Federal Direct Loan, including needing a cosigner. There are also some loans that are not subsidized and are only offered to needy students.

Scholarships – Some scholarships can only be received by qualifying students who are in need of a certain amount of money for tuition and other expenses. The school will base the amount of scholarship on the financial needs of the school.

Family Apprenticeship Program (FAP) – Some FAP loans do not require a cosigner. These loans are usually available to needy students who have a history of employment.

Non-Subsidized Loans – These loans are not guaranteed by the government. They must be repaid either with your own money or by your parent’s money.

Subsidized Federal Student Loans -These loans are guaranteed by the government and come with low-interest rates. They are considered a great way to help needy students afford college.

Even though federal student loans come with a lot of benefits

Students still have to make the final decision on which loan will work best for them. By understanding the pros and cons of the loans, students can then decide if they would like to borrow money or not.

Student loans are a great way to help needy students to get the education they deserve. Now that students have more freedom to choose how to finance their studies, they have the ability to improve their lives and become educated citizens.