The Strain on Personal Finance

What with the global trend for cutting education subsidies, you shall probably find the cost of a college education prohibitive to the extent that your personal finance resources are short of the mark. Clearly, you need to look for financial aid. What options do you have?

Direct Financial Aid

If you're looking for federal financial aid, there are two choices. First, you may opt for the need-based direct-to-student loans like Stafford or Perkins loans. These have a low ceiling for actual amounts disbursed, and will only suffice to supplement your personal finance towards covering college fees and other expenses. The major advantage with these is that the interest rates are quite low – as low as 5% per annum for Perkins loans – compared to market rates. Also, you get a grace period, and needn't start repayments till six to months after the completion of your course.

Indirect Financial Aid

If your personal finance resources are too meager to even partially cover college fees, you may need to apply for another kind of financial aid – the loans made out to parents based on their credit ratings. These are called PLUS loans, and recently they have been made available to graduate students as well. These have a much higher ceiling, so you can hope to cover all expenses with one of these. But on the downside, interest rates are higher than the previous category (but still lower than market rates). And there is no grace period – repayments start from day one.

Private Financial Aid

If these are still not enough, or you need to further lessen the burden on your personal finance, you may want to go for private financial aid, as given out by banks and other financial organizations. But beware that rates and conditions vary from company to company, and you should read the small print carefully before committing yourself.