What are the 4 types of student loans?
There are many types of student loans, but there are four main categories in the United States:
Federal Direct Subsidized Loans: These loans are based on financial need, and the government pays the interest while the borrower is in school, during grace periods and during forbearance.
Federal Direct Unsubsidized Loans: Unlike subsidized loans, unsubsidized loans are not based on financial need, and borrowers are responsible for paying interest over the entire life of the loan.
Federal Perkins Loan: This program is designed for students with exceptional financial need. The school acts as a lender using a limited pool of funds provided by the federal government.
Federal Direct PLUS Loans: These loans are available to graduate students and parents of dependent graduate students. They may cover education costs that are not already covered by other financial aid, but require a credit check.
It is important to note that private student loans from banks and other lenders also exist, but they are not included in these federal categories and may have different terms and conditions.