So, you’ve gotten into the college of your dreams. Your transcripts are stellar, your bags are packed, and your mom is already turning your room into her personal yoga wonderland. Yet somehow you can’t shake the feeling that you’ve forgotten something. What could it be? Oh, right, that’s it! Just how do you plan on paying for the next four years? If your parents don’t have $120,000 worth of disposable income, and waiting on tables isn’t as lucrative as you dreamed, don’t fear. Student loans offer a viable, stress-free way for students of all financial background to afford a decent college education.

Types of Student Loans

There are many types of loans to choose from. Understanding the differences between them can save you the pain of applying for loans which you aren’t qualified for. Likewise, understanding the various types of student loans can literally open your financial—and collegiate—future up to a whole new world of possibilities.

Federal Plus Loans

Repayment on Federal Plus Loans usually begins within 60-90 days after initial disbursement begins, so count on making student loan payments while you are in school. Cost of attendance and credit history are taken into account by lenders, and affect how much you can receive—as well as interest rates.

Federal Perkins Loans

Reserved for those in extreme financial need, these loans offer lower interest rates and repayment beginning a full nine months after a student graduates or falls below half-time status. Loan amounts are typically smaller, and may not be enough to cover all—or most—of tuition.

Stafford Loans

* Subsidized Stafford loans do not accrue interest until you begin repaying them—which generally starts around six months after you leave school. These loans are based on financial necessity, so if your parents make more than a certain amount of money, you may not qualify.
* Unsubsidized Stafford loans begin accruing interest the instant the loan is disbursed and don’t stop accruing interest until the loan is paid in full. You may begin paying some of the interest while you are in school, to help lower payments once you graduate.

No matter what type of loan you decide on, be sure to talk with someone in your university’s financial aid office to determine what loans can provide you with the most financial coverage throughout your education.

Private Student Loans

When government loans fall short of covering school expenses, private student loans, or “alternative loans,” private student loans offer another option to cash-strapped students and their families. These loans are provided by banks, lenders, and credit unions. Keep in mind that the interest rates are set by the lender, and can be higher if you have bad or insufficient credit. Terms can vary greatly from lender to lender, so shop around until you find the best loan—and the best conditions—for your needs.