The Stafford Loans There are two types of Stafford Loans available. This loan allows you to borrow money from the bank at a relatively low interest rate that is capped at 8.25 percent. Stafford Loans are either subsidized, with the government temporarily paying the interest, or unsubsidized. The subsidized loan is based on financial need, whereas anyone can apply for the unsubsidized loan. With an unsubsidized loan, the student pays the interest, which begins to accrue when the loan is made and repayment can be deferred until graduation.
Some students try to maximize their loan amount by combining subsidized and unsubsidized loans.
Pell Grants Pell Grants are federally funded, available to undergraduate students and are based strictly on need. Unlike a loan, they do not need to be repaid. When determining your need for financial aid, the administrator will first consider other aid you are expected to receive. The Perkins Loan is awarded to undergraduate and graduate students and is based solely on exceptional financial need. Colleges and universities receive a limited pool of funds from the federal government, which they award to students on an annual basis.