Undergrad Student Loans

Undergrad Student Loans

7 min read


Federal Direct Loans – These loans are offered by the US Government. While they have some limitations (lowest loan limit is $25,000) they do allow eligible students to access funds with no interest payments. However, if you default on their loans, you will be charged high fees. You should not take out any federal student loans unless absolutely necessary. If you do need money to pay for school, check with private lenders first. Federal student loans are only recommended for low-income students.

Private Loans – There are many private student loan companies offering higher limits than those offered by the government. Many private lenders offer fixed rates and lower loan amounts, making them ideal for higher income earners. Again, these loans should not be taken out unless you really cannot afford to pay for college without them. Most private lenders require a credit check.

Work Study Program – This program is sponsored by the schools themselves. Eligibility varies between institutions and departments, but most commonly work study programs are geared towards helping students who want to get a job while still attending class. These programs cover tuition costs and give students a stipend. Make sure you know what your institution’s requirements are before signing up!

Parental Loans – Parents can often help pay for education costs at their child’s school(s), especially if your child is going back to school full time. Many parents would rather help their children pay for school than having them struggle financially while trying to make ends meet. Talk to your parents about how much they would be willing to contribute, then go to a bank or online lender to apply for the funds. Note: Your parent may be able to borrow the money, but they will need to pay off the entire amount owed. Be careful not to let them borrow more than you can afford to repay.

Scholarships & Grants – Scholarships and grants are always great options to fund your education. Make sure you research and find scholarships that fit your chosen field of study. Grants are given directly from the government, and tend to be awarded based on financial need. Search around for opportunities that are open to international students. A lot of colleges offer scholarships specifically to foreign students.

Undergrad Student Loans

1.Federal Direct Subsidised/Unsubsidised

These are loans offered by the government of India under the Department of Education at subsidized rate of interest. These are provided by the banks and financial institutions including SBI, ICICI, HDFC etc. Under these loan schemes, student can borrow from Rs 5,000 to 50,00,000/- without paying any processing fee. However, students have to pay their school fees, university fees, medical expenses, travel expenses etc.

2.National Bank for Agriculture & Rural Development (NABARD) Loan

This scheme is run by NABARD and provides help to farmers to get loan upto Rs.50 lakhs for farming purposes.

3.Indian Banks’ Association (NBA) Loan

This scheme offers loan of upto Rs.10 lakhs to agricultural sector people who are willing to repay the loan with 8-12% interest per annum.

4.Small Farmers Agri Credit Linked Savings Scheme (SFACLSS)

The purpose of SFACLSS is to provide credit facilities to small farmers engaged in agriculture and allied activities.

5.State Agricultural Loan Board (SALB) Loan

SALB is established by State Government of Andhra Pradesh for providing credit facilities to Small Farmers engaged in various sectors of Agriculture.

6.State Financial Institutions Housing Corporation (SFICH) Loan

This scheme was launched by Govt. Of Maharashtra to assist rural population residing in slums or villages.

7.Central Financial Inclusion Mission (CFINM)

This scheme aims to ensure financial inclusion among poor section of society.

Undergrad Student Loans

Federal Direct Loan Program (FLS)

The federal direct loan program is administered primarily by the U.S. Department of Education’s Federal Family Education Loan (FFEL) Program. Students who receive financial aid awards may choose to have their payments subsidized under this program, which provides them with interest-free loans.

Parent PLUS Loan Program

The parent PLUS Loan program offers parents of dependent undergraduate students access to low-interest loans to help pay for school expenses. The federal government pays 90 percent of the loan’s interest while borrowers make monthly payments.

Government Health Insurance Programs

Health insurance programs provide coverage for lower income families. In 2016, the average cost of tuition at four-year public colleges was $9,900, according to the National Center for Education Statistics. Many schools offer scholarships to those who earn good grades and participate in extracurricular activities.

State Grants/Scholarships

State grants are awarded based on need. Find out if your state offers any grants for higher education. Check with your high school guidance counselor about state grants offered for college. Scholarships are merit-based awards. Learn more about applying here.

Financial Aid Options

There are many different types of financial aid options. Learn what they are and how they work. You might qualify for some grants and student loans. Explore these options before deciding whether or not to borrow money.

College Savings Plans

If you want to save for college, consider opening a 529 plan. These plans allow you to contribute ptax dollars each year. A portion of your contributions may be tax deductible. You can use the money for anything related to higher education.

Work Study

Work study is a program that can assist students with paying for college. Work study jobs range from office positions to farm labor. Learn more about eligibility requirements.


Many universities offer scholarships to incoming freshmen. Local institutions often offer scholarships, too. Search online databases to find out if your school offers any.

Undergrad Student Loans

Federal student loans

Federal loans are essentially any type of loan that comes directly from the federal government. These loans are often called direct loans because they do not require you to go through private lenders or banks, which means you should have little to no problem getting approved for these types of loans. If you’re going to borrow money from the federal government, it’s best to get them while you’re young; this way, you won’t have to pay back as much if you don’t make enough money. There are a number of different programs and options out there, so make sure you know what program is right for you. You may even qualify for both Stafford loans and Perkins loans, which would mean less payments!

Private student loans

Private loans work just like federal loans, except they need to be approved by a lender, such as a bank or credit union. Just because a company isn’t affiliated with the government doesn’t mean they’re unprofessional or shady. Many private companies offer great rates and low interest, so check around before deciding who to use.


Grants are basically free money given to students by the government. For example, scholarships and grants help pay for school activities, books, housing, and food. They might even cover tuition completely. To qualify for some grants and loans, though, you’ll need to complete financial aid forms and send them off to schools, universities, and organizations. Students who receive financial aid are then obligated to fulfill certain rules, depending on the type of grant received. For instance, if you receive a Pell Grant, you’ll have to keep a certain GPA to stay eligible for future grants.

Undergrad Student Loans

Public Service Loan Forgiveness

The first step to getting your student loans forgiven under the public service loan forgiveness program is to make 120 payments while enrolled in school, per the requirements of  IV of the Higher Education Act of 1965. If you have already taken out the loan and started making payments, you may be able to qualify if you were accepted to or enrolled at an eligible institution between July 1, 2007, and June 30, 2012 (the beginning of the repayment period). You’ll need to meet specific income-based repayment requirements, based on either your adjusted gross income or your discretionary income. The loan servicer will determine whether you’re eligible after reviewing your tax returns and financial documentation.

Income Based Repayment Plan

Another option is an income-based repayment plan. Unlike the standard 10-year repayment plan, you would only pay back 15 percent of your monthly payment amount over a 10-15 year period. Your loan balance could then be considered paid in full after 20 years. This type of plan lets you manage your debt repayment according to what you earn rather than having to stick to a rigid traditional repayment schedule.

Pay As You Earn

If you don’t want to repay any of your loans during your lifetime, consider the pay as you earn plan. Payments under this plan still accrue interest. However, those who opt for this plan won’t have their payments increase throughout your career. Instead, they’ll begin repaying your loan once you reach an annual salary of $60,000. After paying off your loans, you can continue to earn additional money without causing your payments to increase.

Graduated Payment Program (GPP)

A graduated payment program is similar to a pay as you earn plan, except payments start immediately upon enrollment. This plan requires no fixed repayment term; instead, you’ll simply make smaller monthly payments until you’ve repaid your entire balance. Once your balance is fully paid off, your monthly payments will decrease to zero. You can apply each time you switch jobs, renew your driver’s license, get married, or change your marital status. A GPP can help you save some money on interest since each month, your payments remain unchanged.

Direct Consolidation Loan

If you’re taking advantage of federal consolidation loans, there’s another way to cut your costs. You can consolidate your consolidated private education loans, including Stafford and Perkins loans, into a single, lower-interest Federal Direct Consolidation Loan. In order to do this, however, both your current and future loans must be owned by the same lender. So if you have loans with several different lenders, consolidating them might not work.

Private Loans

Private loans offer borrowers an alternative to public lending institutions. These loans are offered through banks or credit unions and often require higher down payments and shorter terms than consolidation loans.

Debt Management Plans

Debt management plans are designed to give you control over how much you spend on your debts, and how fast you pay them back. The most flexible types allow you to set a monthly ppayment amount, which goes directly towards paying off your loans. If you fall behind, the amount you owe will go up, but you’ll receive a grace period before payments resume. Other programs provide a budgeting tool that helps you track your spending and set aside extra funds for your debt.

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