When looking at student loans, you have to realize that there are several types and one might fit one person’s circumstances while another one would not. The Stafford loans can be subsidized or unsubsidized student loans. Subsidized means that the interest is paid by the government and unsubsidized means that you pay the interest. As of 2006 the interest rate for a Stafford unsubsidized student loan is fixed at 6%. For loans secured after July 1st 2007 and June 30th 2008 there will a 1% federal default fee and a 1.5% federal origination fee. Some lenders will help you pay this fee while others will leave it up to you.

The student loans that you can receive depend on if you are a dependent and your loans are based off your parent’s income or you are independent and the loans are based off your income. If you are dependent the loans are set at $3500.00 for the first year of school, $4500.00 for the second year of school, and $5500.00 for your junior and senior year. If you are an independent student and rely on your own financies, the first year you qualify for $7500.00, the second year you qualify for $8500.00, and the third and fourth year you qualify for $10500.00. If you are independent, you will see that these amounts will exceed the cost of tuition. It is wise to either use the money to help tuition or to pay the access back to the lending institutions.

If you are dependent the limit of your loans are set at $23000.00 and if independent the limits are set at $46000.00. You can see that your dept at the end of four years of college would be huge if you used all the money. You can offset this amount by applying for grants and scholarships. You should not rely entirely on student loans and you should not take them out at all if you don’t have to. If you end up with a residual from a check and you do not need it to pay daily expenses, give it back to the loan company and have it put toward the principal.