Types of Educational Loans

Types of Educational Loans
There are many ways to get funding for your education; one of the most widely used resources is a federal or private loan.

Federal Stafford
The Federal Stafford Loan is the most common type of federal student financial aid loan, and it requires the completion of the Free Application for Federal Student Aid (FAFSA). There are two types of Federal Stafford Loans:

A subsidized Stafford Loan is awarded on the basis of need. The federal government pays interest on the loan while you are enrolled at least half-time (6 credits for graduate students). Note: Subsidized Stafford Loans made on or after July 1, 2012, and before July 1, 2014, are not eligible for an interest subsidy during the 6-month grace period after you graduate, leave school, or drop below half-time enrollment.

An unsubsidized Stafford Loan is not based on need. Students are responsible for the interest that accrues on an unsubsidized loan while enrolled. No payments are required on any Stafford Loan until 6 months after you leave school (if you have not yet used the grace period) or if you fall below 6 credits for graduate-level enrollment. If possible, you may want to pay accrued interest on an unsubsidized loan while you are enrolled.

Alternative Student Loans
Some students may need additional loan funds after maximizing their federal loan options or may not be eligible for federal loans and still need to borrow towards their education. Many lenders offer private alternative loans to help students meet the gap between financial aid and college costs.

Students must either meet the credit criteria of the loan for which they are applying or have a credit-eligible co-borrower. Many of these loans also require a minimum of half-time enrollment (6 credit hours for graduate study) per term. For more information about alternative loans, please click here: http://www.njit.edu/financialaid/typesofaid/educationloans/privateloans.php

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