Student Loans Basics

Part of your financial aid package might include borrowing. There are several options including federal Stafford loans, parent loans, and private loans.

Federal Stafford loans

There are two types of Stafford loans; subsidized and unsubsidized. Both types of loans are borrowed by the student. A credit review is not required. Some schools offer all of their Stafford loans through the government based Direct Loan Program. Other schools use private lenders.

  • Subsidized Stafford loans are need based. The interest rate is low and fixed, you don't have to begin repaying the loan until after you graduate, and there is no interest charged on the loan while you are in school at least half-time. There is a limit to the amount you can borrow per year and the limit increases as you progress through your college education. Freshmen are eligible to borrow the least, and seniors and graduate students are eligible to borrow the most. The information you report on the FAFSA will determine your eligibility for subsidized Stafford loans.
  • Unsubsidized Stafford loans are not based on need. The fixed interest rate is higher than subsidized loans, and the loans begin accruing interest from the date they are issued. You can choose to defer paying interest on the loans until after you graduate, but the deferred interest will accumulate and be added to your loan balance. There is a limit to the amount you can borrow per year and the limit increases as you progress through your college education. Freshmen are eligible to borrow the least, and seniors and graduate students are eligible to borrow the most.

Parent PLUS loans

Parents have the option of borrowing a Parent PLUS loan to cover the cost of their child's education. A review of the parent's credit report and credit score is required. Interest is charged on the loan from the date the loan is issued. Parents can choose to defer interest payments until the student graduates (for loans originated after July 2008), but the deferred interest will accumulate and be added to the loan balance. If necessary, parents can borrow the full cost of attendance minus any aid received.

Graduate PLUS loans

Graduate students can get a PLUS loan once they have exceeded the limit on the Stafford loans. Although this loan requires a credit check, the approval guidelines are less stringent than a private loan. Like the Parent PLUS loan, interest is charged from the date the loan is issued. Students can borrow up to the cost of attendance minus any aid received.

Private Loans

If you are an undergraduate, have borrowed up to the Stafford limits, and your parents aren't willing or able to get a Parent PLUS loan, you can look into getting a private loan. The requirements to qualify for a private loan are more stringent than Stafford loan requirements (credit report and credit score review is required), and interest rates are substantially higher. Before you apply for a private loan, make sure you've exhausted all your federal loan options.

Contact CCCS of Rochester for help with Student Loans.

We are committed to outstanding customer service. Our Client Support Department is open daily M-F from 9 am - 5pm EST. Explore our consumer credit counseling services. We offer debt consolidation and debt management programs, bankruptcy counseling, foreclosure prevention counseling, housing counseling, and a variety of financial education programs.

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