There are a wide variety of undergraduate student loans available to you if you are still trying to complete your bachelor’s, or associate’s degree. The most common student loans for undergraduate students include the following loans:
- Stafford Subsidized Loans
- Stafford Unsubsidized Loans
- Perkins Loans
- PLUS Loans
- State-based Student Loans
- Private Student Loans
You should apply for federal student loans first before you go ahead and begin to consider your options when it comes to private student loans. You therefore should always submit a FAFSA as soon as possible, as this will get the ball rolling, and should ultimately make you eligible for both of the Stafford loan, the Perkins Loan, and certain types of state-based student loans.
PLUS Loans can only be taken out by your parents when you’re an undergraduate student, and are unlike the other federal undergraduate student loans in that they are partly based on credit, and require the completion of a separate application beyond the FAFSA.
Certain types of state-based student loans may also require a unique application, and to find out about the availability of state-based student loans you should contact either your school’s financial aid department, or the division of your state government that handles education financing.
Private student loans should only be considered after you have received your award letter from your college, and have exhausted all other means of paying for your higher education. This is why private education loans are sometimes referred to as “gap”, or “alternative” student loans, as they should only be utilized when all other forms of financial aid have been exhausted.
This is mostly due to the fact that private student loans cost more than federal student loans, and because they have less repayment benefits such as forbearance, and deferment options.
Right Order When Applying for Undergraduate Student Loans
The correct chronological order you should abide by when you are applying for undergraduate student loans is as follows:
- Federal Student Loans > PLUS Loans + State-based Loans > Private Student Loans > Other Loans
This timeline isn’t really that difficult to understand, as Stafford and Perkins Loans are better loans to have when compared to PLUS, and most state-based student loans, while private student loans are the worst types of loans to have, and should only be used as a last resort when you desperately need money to pay for college.
The Stafford undergraduate federal student loans have lower limits when compared to their counterparts that are available for graduate students. These limits increase as you progress throughout your undergraduate degree program, so don’t be alarmed if your hear about other students receiving more Stafford aid than you may have for that particular school year.
Between all of the above student loan options you should have no trouble getting a very large amount of aid via education loans if you have a high need for such funding, and perhaps the appropriate credentials in terms of credit.
This is because the higher your financial need is for aid to attend college, the more Stafford, and perhaps Perkins, and state-based student loan aid you should be able to receive. While you can get these federal student loans without a cosigner, private student loans are based on credit, and you will therefore need to have good credit, or a creditworthy cosigner to get an approval.
While private education loans should only be looked upon when all of your other options have run out, their primary advantage is that they don’t have the same kind of amount limits when compared to federal student loans. This means that as long as you can get approved, you should have no difficulty borrowing up the entire cost of attendance minus any financial aid when you are still an undergraduate student.
