Explore the diverse landscape of student loans and find the perfect fit for your individual circumstance. From federal to private loans, learn about the options that can help you achieve your educational goals. Whether you are pursuing an undergraduate, graduate, or professional development degree, understanding the various kinds of student loans will help you make informed decisions. 


Federal


    Federal student loans are loans given by the government to help fund students’ higher education. These loans have an easy, free application process (Free Application for Federal Student Aid - the FAFSA® form) and the repayment process typically has lower monthly payments and interest rates compared to private loans. Two distinct kinds of federal loans are subsidized and unsubsidized.

Subsidized


    Subsidized federal Loans are available to undergraduate students, with the school determining how much you can borrow and when the amount is dispersed. The U.S. Department of Education pays the interest while you in school at least half time, for the six-month period once you have left school, and during periods of deferment.

Unsubsidized


    Unsubsidized federal loans are available to undergraduate and graduate students, with the school determining how much you can (based on attendance) and the other aid you may or may not receive during that school year. Interest will accrue during the whole duration you are in school and out of school, with the responsibility of the student paying all the loan. 


Private


    Just like federal loans, private student loans help students pay for their higher education. The key difference is that these student loans do not come from the federal government, but from banks, credit unions, or online lenders. The best way to use a private student loan is when you have maxed out on federal loans but still need more funds to cover the cost of your education. 
    Private student loans typically have higher interest rates, require a strong credit score, require a co-signer, may require small payments to be made while you’re in school, and have a six-month grace period to start the repayment plan. 


What’s Best for You?


    When choosing which student loan type is best for you, consider these factors:

  • Eligibility 
  • Interest rates
  • Expected income following graduation
  • Repayment options
  • Fees associated with the loan

    As you embark on your educational journey, remember that knowledge is power. By understanding the different types of student loans and choosing the best option for your needs, you can pave the way for a brighter financial future. 
    BankIowa partners with Iowa Student Loan. If you are interested in student loans, speak with one of our bankers who can help get you started.

Resources:

Federal Student Aid