Finding out About Loans for School

Payments on federal loans are deferred while the student is enrolled in health care school at least half time. Upon graduation (or when a student drops below half-time status without graduating), the loan enters a six-month grace period without payments. After the grace period, payments are due (unless the individual regains at least half-time student status).

Federal student loans made to students who demonstrate financial need may be subsidized by the government, which means that the government pays the loan's interest while you are in health care school. They may also be unsubsidized, meaning that interest accrues on your loan during college, although payments can still be deferred until after graduation.

This loan group consists of the Federal Family Education Loan (FFEL) Program and the William D. Ford Federal Direct Loan (Direct Loan) Program. Both the FFEL and Direct Loan programs are made directly to students, and they may be subsidized or unsubsidized depending on the student's financial need.

While funds for the Direct Loan Program are funneled directly from the federal government, FFEL funds are issued through a bank, credit union or other participating lender. Loan amounts and eligibility requirements are identical for both programs; however, repayment plans may differ.

These loans operate through FFEL and Direct Loan programs; however, they are geared towards parents. If you are a dependent student enrolled at least half time in your undergraduate education, your parents may qualify for this financial aid loan.

Parents may obtain either loan for you (but not both) during your enrollment in health care school. Applying for these loans takes little more than having an acceptable credit history. In addition, there is a yearly limit on PLUS loans. This limit is equal to your health care school costs minus other financial aid amounts you receive (for example, if your costs are $10,000 and you collect $7,000 in other aid, your parents can borrow up to $3,000 for you).

There is no grace period for these college loans; the first payment is due 60 days after the loan is distributed, and interest accrues immediately. PLUS Loans also include a small fee that your parents will be required to pay. This fee is usually less than four percent of the loan itself.

PLUS Loans are also available for graduate and professional degree students in the field of health care education. These graduate loans are not accessed through your parents.

Private student loans can be made out to either students or parents. They offer higher limits and no payments until graduation, but interest starts accruing immediately.

Private lenders can also help pay for your health care education. Fortunately, private loans are less expensive than credit card debt. Also, private loans don't require you to complete federal forms such as the FAFSA.

Eligibility often depends on your (or your parents') credit score. If your credit score is lower than 650, your chances of being approved for a private loan are unlikely.

Perkins loans are available to both undergraduate and graduate students, and they operate similar to a Stafford Loan, with several notable differences:

• The loan uses combined government and school funds, but it must be paid back to your health care school.
   
• Unlike Stafford Loans, there is no fee associated with Perkins Loans.
   
• Levels of funding depend on when you apply for the FAFSA (remember, the closer to January 1st, the better), your level of need and your school's level of funding.
   
• Perkins Loans have a longer grace period (the time between graduation and when payment starts) than most other loans—nine months, as opposed to six months for Stafford Loans.
   
• Perkins Loans also have a 10-year repayment schedule.