Loans. What type of student loan is best for you?
There are various ways to finance your college education. It is highly recommended that Students and parents conduct research to select the best financial option for managing college expenses.
For more information about student loans and college planning, the RISLA College Planning Center offers free appointments to assist students and their families prepare, plan, and finance their college education.
Federal Student Loans
Federal student loans are borrowed from the Department of Education and administered through the Office of Federal Student Aid. The loans are serviced by one of several federal contractors hired to service federal loans. The loans are not grants or scholarships and must be repaid to the servicer with interest. Students should consider Federal Direct Subsidized and Unsubsidized Loans before seeking other loan options. Federal loans provide unique benefits, such as not requiring a cosigner.
Federal Subsidized Loans
- Federally subsidized loans are deferred repayment loans, which means no payment is due until six months after the borrower leaves school.
- During the time before the borrower is required to make payments (during school and the 6-month grace period), no interest accrues for subsidized loans.
- Federally subsidized loans are intended for students who demonstrate financial need in the FAFSA.
Federal Unsubsidized Loans
- Federal unsubsidized loans are deferred repayment loans, which means no payment is due until six months after the borrower leaves school.
- However, unlike subsidized loans, interest begins accruing as soon as funds are disbursed to the school.
How to Apply
- Complete the FAFSA by your school's specified deadline.
Federal Direct PLUS Loans
A Federal Direct PLUS Loan is commonly known as a parent PLUS loan when issued to a parent and as a grad PLUS loan when issued to a graduate or professional student.
Lender
Credit
Maximum Amounts
The Financial Aid Guide
Provides free tools and resources for parents and students to navigate the college financial aid application process.
State-Based Education Loans
State-based loans, offered through a dedicated network of non-profit lenders like RISLA, are an excellent opportunity for individuals seeking financial support.
Rates
Interest rates are traditionally lower than most private lenders and the Federal PLUS Loan.
Parent & Students
Customer Service
State-based lenders like RISLA are typically much smaller than other private lenders. Accordingly, the customer service support you receive is much better, as the representatives are not overwhelmed by call volume or the expected cross-selling of other banking products.
Private Student Loans
Private loans are provided by banks and other lending institutions. Similar to most bank loans, student loans can have either a fixed or a variable interest rate. The rates you receive are often influenced by your credit score, so be cautious not to assume that the lowest advertised rate will apply to you unless you have met all of the underwriting criteria.
Pay Now or Pay Later
Interest Rates
Credit Check
Institutional Student Loans
Institutional loans are a type of financial assistance that colleges provide directly to their students. These loans can help students or their parents bridge the gap between the federal aid they qualify for and the total cost of attendance.
About
Institutional loans are non-federal aid provided by the borrower’s school. These loans typically do not offer the same benefits as federal loans. Borrowers with institutional loans should contact their school or loan servicer for information about loan options.
Loan Servicer
The loan servicer may be the borrower’s school or an agency hired to service the loan.
Repayment Options
Repayment options and interest rates differ by school.
Factors to Consider When Comparing Student Loans
Check out these important factors to help you compare the loan types above and find the perfect fit for your unique situation!
APR
The Annual Percentage Rate is a rate that expresses the total cost of a loan, including the interest rate, and any fees. You can use the APR to get a better side-by-side comparison of loans than looking at the interest rate alone. Federal student loans are exempt from APR disclosures.
Cosigner
Most non-federal loans will require a cosigner. If there is no cosigner on the loan, the interest rate is typically higher. If you are the cosigner on a student loan, make sure you understand your obligation and read the fine print before you sign the promissory note.
Default
Federal student loans are declared in default if payments are more than 270 days past due.
Private student loans can default as soon as four monthly payments (120 days) are past due.
Deferment
Can the loan be deferred while in school? What is the maximum amount of time the loan can be deferred?
Deferring payments while in school increases the total amount you pay over the life of your loan, so if you can make payments now, do it!
Fees
Understand the fees associated with your loan, including any upfront fees like origination or application fees, as well as default or repayment fees. Be aware of back-end fees for returned or late payments.
While it's best to make payments on time, it's important to know how these fees could affect you in difficult circumstances.
Forbearance
It is important to find out what the forbearance procedures are and how much time you can get if you can't make payments due to your financial circumstances.
Interest Rate
What is the interest rate on the loan, and is it fixed or variable? A lower rate is better but consider other factors as well.
A low rate on a variable loan may rise when repayments begin. Assess your family’s willingness to take on risk and understand how the index for variable rates can change over time.
Monthly Payments
Estimate your monthly payments based on the amount you're borrowing, considering all four years to ensure affordability. Also, check the interest rate type—remember that variable rate loan estimates may change as rates fluctuate.
Repayment
What’s the ideal repayment term for your loan? A shorter term can save you on finance charges, although it leads to higher monthly payments. On the other hand, a longer-term might increase overall costs but offers the advantage of more manageable monthly payments. Let’s find the best fit for you!
RISLA Scholarship Hub
Helping parents & students pay for college.
Did you know college scholarships are free money to help pay for college expenses? Well, it's true! And the RISLA Scholarship Hub is here to help students and parents find extra funds to help pay for college.
💸 The best kind of funds . . . the kind you don't have to pay back!
Enter to Win!
Knowledge for College Scholarship!
Check out the Knowledge for College Scholarship! We award $2,000 each to four randomly selected students every month. Whether you need help covering tuition, books, or living expenses, our scholarship can help ease the burden.
🤩 Take your chance to win - enter every month for your prize!
rischolarships.org
A free scholarship search tool!
Discover hundreds of local scholarships waiting for you. The search is fast and simple, making it effortless to find your perfect match!
We are with you for the journey.
College Planning
A free service aimed at helping students achieve their goal of attending college and paying for it. The CPC assists thousands of students and families each year in planning for higher education.
Scholarship Hub
Check out how to prepare for college—access free tools and resources. Find local scholarships for college, and parents and students can enter to win $2,000 in college scholarships!
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Student Loans
Our student loans offer flexible repayment options, competitive interest rates, and a simple application process, making them an ideal choice for parents and students.
Refinancing
With our refinancing options, you can enjoy the benefits of low fixed interest rates, no fees, and an auto-pay discount. Take advantage of this opportunity to save money and simplify your finances.
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