Loans

Your need-based financial aid package will likely include loans.  The most popular federal government loan program is called the Stafford Loan.  Rates on these loans will change every July 1st but are typically better than loans from private lenders.  The Perkins loan program also offers relatively favorable terms. 

The other popular loan program from the government is the PLUS program for parents.  This is a non-need based loan and you may want to compare the terms of this loan against other options.

If you are in the common situation of needing additional loans beyond what is offered, you can look to the many student and parent loans offered by private or quasi-public institutions.  The terms can be confusing and many of them will adjust your interest rate based on the credit score of the borrower and/or co-borrower.   Just because a lender is offering a great interest rate, it does not necessarily mean that it will be your rate!

In addition to the loan offers from commercial lenders, families may want to consider other options—like loans from family members, home equity loans, or loans from other investments.  We also recommend consulting the college of choice for their recommendations as some lenders arrange favorable terms with certain colleges and universities.