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How to Score a Loan for College

How to Score a Loan for College

Anne Tergesen / BusinessWeek

Federal Loans

Because federal loans are less expensive than private loans, borrow up to the maximum you’re eligible for before considering a private loan. With a Stafford loan, an undergraduate can currently borrow up to $3,500 for freshman year, $4,500 sophomore year, and $5,500 annually thereafter, for a total of $23,000. Parents can then follow with a PLUS loan for the balance of what’s owed for tuition, room and board, and fees—or if they choose, up to the full cost of attendance.

Stafford loans charge a maximum fixed rate of 6.8%, while PLUS loans charge 8.5%. These loans have other advantages: Anyone can qualify, regardless of income, and borrowers who encounter financial hardship can request repayments be suspended or reduced.


Poll: How do you feel about crying at work?

Poll: How do you feel about crying at work?