Though its possible to get private student loan with low interest rate but still best choice is federal student loans. There is no doubt about that lower interest rate student loan is more beneficial because lower interest rate means lower payments and shortened repayment period and more money in your pocket.

Another beneficial aspect of low interest student loans is the subsidized federal student loans. If you get a Stafford Loan or Perkins Loan then government will pay the interest while you are in school and even up to nine months after you graduate.

Two Major Types of Low Interest Loans

The major type of Low Interest Student Loan is a federal, now we will look which types of federal student loans offer extremely low interest rates and other benefits to students.

Stafford Student Loan

Stafford Student Loan is a low interest rate student loan that allows the students with to no credit to afford college. As federal student loan Stafford Loan has different requirements than standard lender like bank. This loan is not based on your credit score; it is based on whether or not you fall within the eligible income bracket. In its basic requirements is that you will attend school at last half time and if you have never defaulted on a loan before.

There is a limit of interest rate on Stafford loan that how high it can be. Currently interest rate on that is 8.2% though most people get a rate that is lower than this. The main benefit on Stafford Student Loans is that it’s subsidized, meaning that the government will foot the bill for the interest that accrues while you are in school. Stafford Loans are also available unsubsidized but the low interest rate still applies.

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Financial aid award letters from the colleges where you had applied and been accepted. Now there are several different financial aid offerings. So the question is that how to know that which school package is right for you and what the terms in that package meant? Which package is better than another for you?

Features included in financial aid award letters

Here are the main features that are mostly included in college financial aid award letters:

• Cost of Attendance
• Expected Family Contribution (EFC)
• Federal Grants
• Subsidized federal loan offer
• Unsubsidized federal loan offer
• Institutional grants and scholarships
• Unmet need

Learn and try to understand each of these award letter features and compare them.

Cost of Attendance (COA)

College award letter will always give you an exact figure of the cost to attend the college. It is not cost of tuition. Cost of Attendance (COA) is comprised of following features:

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Education is sometimes a burden for most students. Everyone wants to achieve a valuable degree, however, for some the cost is sky high and if the student happens to be from a lower, middle class, then he is expected to give up all his dreams.

Well! thankfully, there are student loans and student grants that help such students, to achieve their desired goal of education. Before you go into understanding the different types of loan and grant schemes, you need to understand what’s the main difference between the two.

A student grant is actually an option for those students, who do not want to go into the horrible burden of debts for funding of their education. This is mostly granted by the Federal Government based on the merit of a student. The one thing that differs grant from loans is that grants don’t ever have to be repaid. A student studies at the expense of the government.

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