If you're committed to getting your bachelor's degree and eventually earning more money, taking out educational loans may feel like going in reverse. However, the financial investment of student loans may provide the funding necessary to complete your educational program.

By postponing repayment of your loan until you're out of school, it's possible to get your degree with less financial stress. The Federal government pays interest on your Federal loans while you work on your degree, which gives you the opportunity to land that great new job before you have to repay your loan debt.

Stafford and PLUS Loans
Students most commonly use Federal Stafford Loans to finance their educational costs. The information you submit every year on your FAFSA helps your school determine your eligibility for this loan. The type of loan you receive varies depending on your income, dependent status, and student enrollment status.

The annual Stafford Loan limit for a freshman dependent on a parent or guardian is $2,625, and the loan limit for an independent freshman is $6,625. If you qualify for a subsidized Stafford Loan, the government pays the interest on the loan while you are in school and for a six-month grace period after you graduate, drop below half time, or leave school. Find more information on Stafford Loans here.

Parents of dependent students can also apply for a Federal PLUS Loan Program to borrow funds to pay for student educational costs. The Federal PLUS Loan offers an unsubsidized loan with a capped variable interest rate. See Federal PLUS Loans for more information.

Perkins Loans
Your school awards the Federal Perkins Loan based on the information you submit on your FAFSA every year. If you qualify for the Perkins Loan, you have no up-front fees, a nine-month grace period after graduating or leaving school before you have to begin repaying the loan, and a low (5%) fixed interest rate. Perkins Loans are typically offered to students with the highest financial need. See Perkins Loans for more information.

Private Loans
Banks and other private educational lending organizations offer private educational loans with a variety of different requirements and options. Interest rates and fees are usually higher than for Stafford or PLUS loans and eligibility for private loans is based on your credit and involves a credit check.

Students applying for expensive educational programs like law and medical school are the most likely to take out private loans. If you need more financial assistance to balance school and your life, private loans can provide an effective supplement other financial aid you have been awarded. See private loans for more information.