The College YearsBefore you go off to school, discuss monetary issues openly with your parents.
Have a plan. Know which college expenses they’ll cover and which you’ll have to pay. Once you agree, have them set up a plan for disbursing funds. Monthly payments work best: if they give you a large lump sum at the beginning of the semester, you might spend it all the first few months, and you’ll never learn the value of living on a budget.
Stafford Loans. There are two Stafford Loans:
Stafford Loans are subsidized or unsubsidized. You must show financial need to get a subsidized Stafford Loan, for which the federal government pays the interest while you’re in school. You don’t have to show need for an unsubsidized Stafford Loan; you pay the interest, with payments deferred until after graduation.
All lenders offer the same rate for a Stafford Loan, although some give discounts for on-time and electronic payment. Repayment begins six months after the student graduates or drops below half-time enrollment. The standard repayment term is 10 years, although you can get access to alternate repayment terms (extended, graduated and income contingent repayment) by consolidating the loans.
Perkins Loan. This subsidized student loan is awarded to undergraduate and graduate students with exceptional financial need. Your school is the lender using funds provided by the U.S. government. The interest is paid by the federal government. The amount of your Perkins Loan (within limits) is determined by your school's financial aid office.
Other Student Loans. If you need more financing than what federal student loans can provide, private loans are available.