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University Loans

A loan is a way of financial aid that universities give to students, unlike the scholarships the loans need to be repaid with interests. There are two types of loans for students, the first one is given by the federal government and the other one is the private loan.

If you are going to apply for a loan, find out the interests and repayment, special terms like debt and amortization. Before taking a loan make a thorough analysis of what you can afford.

To obtain a Federal student loan, the applicant must present the Free Application for Federal Student Aid (FAFSA). The main Federal Loan programs are:
Student loan paperwork

Federal Stafford Loan

You can fill out a FAFSA in their website: http://www.fafsa.ed.gov/, the procedure is easy but first you have to read some important information available in the same website. Read the instructions carefully and do not stay with any questions.

  • Applications deadlines vary each year, find out the dates here http://www.fafsa.ed.gov/before003a.htm.
  • It is also important to complete the tax return, you can do it by yourself, or your parents if you're a dependant student.
  • Generally all you need to do is described in the FAFSA website, but it is preferable that you check for more information, ask your state agency and the financial aid office if you need to fill any other required forms.
  • If you want to find out more information about student financial aid you can visit these websites: www.studentaid.ed.gov and www.students.gov
  • The documents you need to present are: Your Social Security Number, your driver's license, your W-2 Forms and other records of money earned, your Federal Income Tax Return, your Parents´ Federal Income Tax Return, your current bank statements, your current business and investment mortgage information, business and farm records, stock, bond and other investment records, your alien registration or permanent resident card (if you are not a U.S. citizen).
  • Finally, as a warning, it should be noted that there are several organizations that seek to profit from the information on loans. Some charge for sending your application, be careful because you can be a victim of a scam.
This kind of loan includes:
The main differences between them both are: the plan of repayment, FFEL funds are given by the bank or some other private lender and Direct Loans come from the Federal government.

Federal PLUS Loan

Also known as Parent PLUS Loan. This Loan can be given by the FFEL or by the Direct Loan to parents of dependent student and the credit criteria is not very strict as other loans. Parents need to file the Free Application for Federal Student Aid (FAFSA), it is not a requirement but a suggestion because most schools need the FAFSA to be filed.

Interests and Payment



Private Student Loan

If you already have a Federal loan and you feel it’s not enough to afford the cost of your studies you have other option, this is called Alternative Student Loans or Private Student loan. This type of loan is exclusively used to pay educational expenses and it’s required to have a creditworthy co-signer, this could be a relative, your parents or any friend with a good creditworthiness.

Generally Private Loans offer lower interest rates than credit cards, that’s why you have to search deeply about items like Annual Percentage Rate (APR), interest rate, length of repayment, and all economic points.

To get a Private Loan you need to meet certain requirements:

  • Have an authentic Social Security number from US.
  • Do not have any bankruptcy.
  • Maintain a satisfactory progress with the school standards.
  • Be a U.S. citizen or permanent resident.
  • Have passed 12 months at least, from the last loan.

Rolled coins, loose coins and student loan brochure

Federal Student Loans are preferable to Private Student Loans, but there are some families that have Private Student Loan as first option. If you also decided for this option take on count the loan amount, don’t borrow more than you can pay.


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