The federal Supplemental Educational Opportunity Grant is actually administered by colleges themselves. The two most common and attractive need-based loans are the Perkins and the Stafford, both federally funded. Payment begins only after the student graduates, leaves college or falls below half-time student status. The drawback is that interest accrues immediately, although the borrower can defer the interest payment until he begins to repay the principle, usually after he graduates or leaves school. As its name implies, this loan is made to parents, not students.
Parents can borrow up to the annual cost of attending college, minus any financial aid received.
This loan is dependent upon your credit rating, although the requirements are not as stringent as for a mortgage. If you have an adverse credit rating, such as judgments or liens against you, you may still be able to get a PLUS if you can find a co-signer who is willing to take responsibility to pay the loan if you fail to. The drawback of this loan is that repayment begins 60 days after you receive the loan, although the repayment period can last 10 years. There are also private loan options such as bank lines of credit, home-equity loans and Signature Student loans, offered by Sallie Mae and Excel loans, offered by Nellie Mae . Private loans such as these are less appealing than the unsubsidized Stafford, however, because the interest rate is usually at a premium to the prime rate, and repayment may start immediately, rather than being postponed until the student graduates.