There are many ways of funding for higher education. Some students get full scholarship or at times parents who can afford it, fund the entire education program. Students, who cannot afford this, look for options to fund their education through school loans as tuition fees is not the only expenditure during the course of education. It also involves money towards accommodation, books, equipments, food etc.
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School Loans
School loan involves being in debt for a certain period of time. This, though being little stressful, tend to make student more financially responsible as they need to repay the loan. School loans have many advantages over regular personal loans like the terms and conditions for repayment along with the interest rate are much lesser. The time limit for repayment of the loan is also quite lenient and students can acquire a job prior to repaying the loan.
Best school loan programs
There are two different types of school loan which students can access - federal and private school loans.
Federal Loans is offered by the federal government is the most viable form of school loan. The advantages of federal school loan are :
- All students can opt for it.
- Lesser interest rates.
- Time limit for repayment is much longer.
- Offers a chance to either defer or postpone repayments.
- At times even provide school loan forgiveness.
If financial requirement is well demonstrated, students can also get a subsidized federal school loan wherein the interest is paid by the government over a period of time when the student is studying or when he has opted for deferment. An application called the Free Application For Student Aid or FAFSA needs to be filled to get a federal school loan.
There are two types of federal school loans :
- Federal Perkins Loan - a low interest loan offered by the school itself which in turn is funded by the government.
- Federal Stafford Loan - is the most common school loan with a grace period of six months towards repayment after finishing your graduation. It is offered as a subsidized loan depending on the financial need.
Private Loans Usually the loan amount offered by federal school loans is not adequate to take care of the complete expenditure of higher education. Then a private school loan comes handy. These private loans have higher interest rate as compared to federal school loans and is unsecured loan as no assets are attached to it as guarantee. They are offered based on the student's credit rating along with the interest rate applied on the loan. Unlike federal school loan, the money given by private school loan can be used for any purpose.
Other school loans offered in UK are :
- HSBC Graduate Loans is offered to students having Cambridge MBA and the loan takes care of the tuition fee up to £28,000 along with living expenses of up to £5,000.
- The Association of MBAs (AMBA) for UK residents for MBA is offered by the NatWest Bank. For edibility, the student must be a resident of UK undergoing MBA program from an institute accredited by AMBA.
Applying for school loan
The student finance application enables students to apply for a School Loan as well as any grant or scholarship the university or college or from the government. The application forms depend on the following aspects :
- full time studying
- part time
- undertaking teacher training, healthcare, social work or Open University
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