Loans are borrowed funds which must be repaid, with interest, after you are no longer a student or you are attending less than half-time. If you do not make your regular payments, you could end up in default, which has serious consequences. The FY2013 3-Year Official Cohort Default Rate (CDR) for Louisiana Tech University is 6.7% which is below the State average of 12.3% as well as the National average of 11.3%. Our office recommends to only borrow as much as you "need" and student loans should be an absolute last resort. A student always has the ability to refuse all or borrow less that the maximum loan amount allowed or awarded.
As college costs climb, many families find that supplemental borrowing by the parent or student becomes a necessary resource for financing educational expenses. The following are different types of loans a student or parent can acquire.
The Perkins Loan is a low interest loan (currently 5%) designed to help undergraduate and graduate students pay for educational expenses. Funds are limited; therefore, students who complete their financial aid files by the published priority deadline will be given first consideration.
Many students rely on federal government loans to finance their educations. These loans have low interest rates and do not require credit checks or collateral. The federal loan for students is called the Stafford Loan and is under the Direct Loan Program. These loans are provided by the U.S. Department of Education using federal funds. These loans are made by the federal government.
Federal Direct PLUS Loans enable parents with good credit histories to borrow funds to pay the education expenses of each child who is a dependent undergraduate student. Students pursuing a graduate or professional degree with good credit histories can also borrow from the Direct PLUS Loan program. Direct PLUS Loans have fixed interest rates of 6.41%.
Private (Alternative) Loan
Private or alternative loans are available to students who are not eligible for financial
aid or who need additional funds to meet educational expenses. The student's eligibility
is determined by the cost of attendance minus other financial aid.