Student Loans and Grants

College costs in the United States have gone up rapidly in the past few years. Millions of students – and parents – around the country are finding it increasingly difficult to meet the expenses of a higher education. As a result, they are forced to rely on other sources of funding which include student loans and grants. More than 65 percent of all college students rely on student loans and grants to pay for tuition. Federal and state governments as well as a number of private organizations offer a large number of student loans and grants.

One way to pay for college is by taking out a student loan from the government or a private lender. Student loans differ from other types of loans in the fact that they generally have lower rates of interest and a longer time for repayment. Students who do not find work after graduating can defer payments or apply for forbearance. Options such as loan forgiveness and tax-write off in line with the amount borrowed make student loans com an attractive option. Student loans on offer include Federal Perkins Loans and Stafford Loans. These loans are 100 percent secure as they are guaranteed by the government and come with interest rates ranging between 1.9 to 5 percent. A number of student loans are also offered by private lenders – however, these loans usually carry more conditions as compared to Federal student loans and are not the top preference for most students.

Most students apply for, and prefer, student grants which are essentially a “gift” of money from a number of sources that can go towards meeting the cost of college. Unlike a student loan, the money obtained through a grant does not have to be paid back. Student grants include Pell grants, which are offered by the Federal government, and cover between 30 to 60 percent of tuition fees. The amount awarded under Pell grants has been increase  by more than 20 percent recently, making it an excellent option for students to finance a higher education. In order to apply for college student loans and grants, applicants can fill out a Free Application for Federal Student Aid or FAFSA online.