Subsidized, Unsubsidized, PLUS and Perkins. What's the difference? After filling out the FAFSA, you will receive a Student Aid Report (SAR) telling you what loans have been approved for you. These are the four types:
1. Stafford Direct Subsidized: Based on financial need. You do not have to pay these off until you graduate; the government pays your interest while you are in school.
2. Stafford Direct Unsubsidized: For eligible undergraduate, graduate and professional students; not based on financial need. The student normally pays interest only on these loans while attending college.
3. Direct PLUS Loans: For parents of dependent undergraduate students, and for students in graduate or professional programs, regardless of financial need. Payments can be made while the student is in school or defer payments until graduation.
4. Federal Perkins Loan: The school is the lender; based on exceptional financial need.
Many banks offer educational loan options. Make sure loan offers you may receive online or in the mail are from a reputable financial institution or loan company. You'll have to make payments while you are in school, so consider private loans as a last resort.
With any type of loan — federal or private — the amount you pay off will be much more than the amount you were loaned, so spend it wisely and only use it for your college costs.