Student loans require borrowing money from a lender and then paying it back with interest over a period of time. All student loans must be repaid. There are various types of loans and it is important to research each one and see which would serve you best.

Stafford and Perkins loans are common forms of student loans. The advantage of these loans is that they usually offer low interest rates and don’t require credit checks or collateral from the student, which makes it easier to qualify. To apply for the Stafford Loan, you must fill out and submit the FAFSA (Free Application for Federal Student Aid). This particular loan is campus-based, which means the lender you’ll be borrowing your loan from is actually the school itself. Many consider Perkins Loans to be the best type of student loans to apply for because the student is allowed up to 10 years to repay the debt and is a subsidized loan, which allows the interest to be paid off by the federal government. That means once you graduate you will owe exactly the amount you borrowed without any interest added.

PLUS loans are covered by private lenders such as banks or directly funded by the government. The catch with the PLUS loan is that it is entirely the parents’ responsibility to repay the loan in full and on time—not the student. PLUS loans are not subsidized, which means the parents must pay the accruing interest while the student is in school. The repayment period begins 60 days after the money has been disbursed, with the repayment term being up to 10 years. There is no grace period. Parents can opt to defer their monthly payments on the loan while the student is enrolled in school, which allows them to postpone making payments until after the student graduates.

Private loans are offered by private lenders and don’t require the FAFSA or other federal applications to be eligible. Many parents and students turn to private loans when federal loans don’t offer enough money to meet the costs. However, private loans usually cost more than student and parent loans and can have higher fixed interest rates. Private lenders don’t always offer the best repayment plans or loan forgiveness programs that are typically offered by federal education loans so it is vital that you do all of your research and exhaust all other possibilities before becoming involved with a private lender.