Forms and conditions of student loans in the US

Student loans

To pay for training American students can take advantage of credit funds. In the US, for such purposes, there are 3 main types of loans:

student loan - student loan,
parent loan - parent loan,
private loan - private loan.

To simplify loan repayment system is also provided consolidation loan (combined loan), which brings together all the existing loans to one borrower.

Stafford Loans

In turn, Stafford loans are classified on a subsidiary (subsidized), the interest on which shall repay the government, and Default rules (unsubsidized), the interest of which the borrower pays on their own. In this case, the student has the opportunity to obtain a deferral of payment until graduation. Any student can not take advantage of a subsidiary loan. Yet, for a subsidiary loan the student must document that really needs financial support from the state.


Conditions for students, which include parents

Students who comprise parents have the opportunity to obtain a loan in the following amounts: first course - up to 2625 USD, the second year - 3500 USD, and each subsequent course - 5500 USD. Students who have their own income, the opportunity to receive an additional loan of $ 4000 USD for the first two years and USD 5,000 in subsequent years of study. For graduate students provided the opportunity of the annual loan in the amount of USD 18,500, but only 8,500 USD of this amount is subject to subsidizing.

The interest rate on student loans

The interest rate on student loans variable. It is calculated by adding the 91-day rate of return on Treasury bills (T-bill rate) and 1.7% over the course. At the end of the educational institution to the rate added another 0.6%. The interest rate set annually in a range not exceeding 8.25%. All lenders make loans at a flat rate, but, nevertheless, each of them may individually give discounts for repayment by installments and the electronic system.

Grace Perkins Loan (Perkins Loan)

Undergraduate and graduate students with the difficult financial situation can get a soft loan Perkins (Perkins Loan). In this case, the lender is the institution that manages the funds allocated for these purposes from the federal treasury. Since this loan subsidiary, the interest thereon shall be paid by the federal government during the period of study. The interest rate on this loan is 5%, maturity - 10 years. Also, the delay of payments on the loan for 9 months. Loan Amount sets the financial aid office of the institution. For students there are restrictions in the range of 3000 USD per course for graduate students - 5000 USD. The total amount of restrictions for students - 15,000 USD, so for graduate students - 30 000 USD. Expanded Lending Option (ELO), institutions that are in the program for the expansion of credit, have the right to change the limit of restriction. In this case, the loan amount is increased to 1000 USD per year, the total amount for the students - to USD 5,000 for graduate students - to 10,000 USD. In addition, the simplified cancellation conditions apply for the loan Perkins.

Credit for the education of children (Parent Loan)

Parents of dependent students have the opportunity to receive credit for the training of children (Parent Loan). The federal Parent Loan for Undergraduate Student (PLUS) - parent of the federal credit, allowing to take the amount of cavity covers the cost of training, as opposed to student loan. PLUS Loans can be issued by both private organizations and government agencies. The interest rate on this type of loan is made up of 52-week treasury bills yield rate T-bill rate and 3.1%. It can vary in a range not exceeding 9% threshold. Payments on the loan starting from the 60th day after the receipt of the loan, the term of full repayment - 10 years. Parents are fully benefit obligations 

Private loan (Private Loans)

Private loan (Private Loans) also called alternative (Alternative Loans). This type of loan allows you to get the remaining amount of money for full payment of the training, as the loan amount under the program of the government at times is not enough. Alternative loans are given different types of private entities. For their preparation is not required to fill out a federal form.

The combined loan (Loan Consolidation)

Loan Consolidation - combined loan. This type of loan allows you to combine several loans granted to one creditor (eg, student and parent). This greatly simplifies the process of repayment. The combined loan reduces the monthly amount of payments by extending the loan full repayment. Unlike federal loans, which are issued for 10 years, provide alternative repayment period from 12 to 30 years. The interest rate as an average of interest rates of loans combined. The rate is rounded to 1/8 in a big way, but does not exceed 8.25% strength threshold