Student Loans 101: Everything You Need To Know

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hey guys it's Erica and welcome back to

my channel today I'm going to be giving

you guys the four one one on student


so in this video I'm gonna be telling

you guys about all the different types

of student loans out there and what all

they entail I'm also gonna be giving you

guys some pros and cons and choosing the

right student loan for you or your

student so before we get started I will

not be discussing the repayment of loans

in this video I also won't be discussing

grant scholarships and any other means

of paying for your tuition besides

student loans so you guys want me to

talk about scholarships and how to find

them or you guys want me to talk about

the repayment of loans definitely put

that in the description box down below

or in the comment box down below and I

will definitely make a separate video

for that and if you guys are watching

this video and there's something that I

don't get into detail about and you

would like to know more about it

definitely tell me that in the comment

box down below as well so I can make a

separate video addressing what you want

to know so to make sure that this video

isn't too long let's hop right into it

let's go so there are two types of loans

out there that you can get there are

federal loans and there are private

loans and these two categories come with

an arrangement of different

subcategories that follow them so the

first one that we're going to talk about

are the federal loans these are the

loans supplied to you by the government

and they're probably the ones draw a lot

more familiar with there are six types

of federal student loans out there the

first one's gonna be your direct

subsidized student loan this one's for

undergraduate students who demonstrate

some sort of financial needs so

basically are just gonna go online fill

out your FAFSA and they'll tell you how

much money that you qualify for and your

interest will be paid during school and

you won't have any interest after school

either so this is your subsidized loan

meaning your interest is going to be

paid the next student loan is gonna be

your direct unsubsidized loan now for

this one you don't have to demonstrate

any sort of financial need you must be

an undergraduate student but your

interests will not be paid so you will

have to pay interest at the end of the

day now you won't have to pay interest

during school if you choose not to but

when it comes to paying your loans back

you will have to pay interest in so the

direct subsidized and unsubsidized loans

are probably the ones that you're gonna

hear the most about they're probably the

most common ones and I know that it says

you need to demonstrate some sort of

financial need for the subsidized loan

but let's be serious I have yet to see

anybody turned down for a student loan

so if you're reaching out to try to get

that subsidized interest paid loan don't

fret just apply go to the FAFSA website

apply for and I bet you're gonna

now the next one is gonna be the Direct

PLUS loan the first two were for

undergraduate students this one is for a

graduate or a professional the only

difference between this one is you have

to have good credit to get it they do

run your credit to see if you're gonna

pay it back and they kind of figure out

the cost for you with your subsidized

and your unsubsidized loans do you feel

like your FAFSA application they figure

out how much money they're gonna give

you and that is that now with your

Direct PLUS loan they're going to take

the cost of attendance subtracted by any

other student financial aid that you

have and that's the amount of money that

you're gonna get so if you don't truly

have a reason to do the Direct PLUS loan

you're probably not gonna qualify for it

like if you need five dollars you're not

gonna qualify for it now the next one is

gonna be your direct consolidation now

this one is not much of a loan per se

but in a way of repaying your loans back

when it's time this is for undergraduate

students you have to have an exceptional

financial need meaning you you really

need to put all of your loans

underneath one loan the only thing about

consolidating your loans is the fact

that you lose all the benefits at the

low interest you lose all of those

things when you consolidate so make sure

to think twice about that the next

student loan is gonna be your federal

Perkins loan this is for undergraduate

students with an exceptional financial

needs someone who seriously needs money

to pay for their tuition or for their

books or for just things related to

school now when you usually get a

student loan you're gonna have what's

called a loaner the person who's giving

you the money usually it's gonna be

Sallie Mae or nail NIT or whatever

company that's supplying your school or

whatever with the money now with your

federal Perkins loan your school is your

loaners so you're gonna actually make

your student loan payments back to your

school so it's a little bit different

but you can definitely apply for that

not all students do Perkins Loans but if

they do it's a great thing to apply for

if you truly need it to the last loan

I'm going to talk to you guys about is

the Parent PLUS loan this is an

undergraduate loan it has low interests

and it's actually for parents who want

to co-sign so that their students can

have a little bit more financial aid

money now what they're gonna do is

they're gonna run a check that credit

check on the parents to make sure that

they're able to pay the money back of

the Hat or that they have good credit

that they're known for paying the bill

you know stuff like that but the only

thing about the Parent PLUS loan is what

if you have a child who decides that

they want to not go to school or they

don't want to pay that loan back then it

does follow the parents to make sure

that that loan gets paid off both the

child's credit and the parents credit is

checked it will destroy your child's

credit and it'll also come back and

destroy your credit because your

cosigner on it as well so definitely

take those things into consideration ok

so now let's talk about private loans

there are two types of private loans

you're gonna have your school channel

loans and your direct to consumer loans

now private loans are offered to you by

banks or finance companies usually

they're not connected to the school in

any way the first one's gonna be your

school channel loans this one is

actually certified by the school it has

a lower interest rate but it can only be

used for things associated with the

school like school books and things like

that they do do reimbursements but I'm

not quite sure how often and if they

don't just roll it over to the next

semester and keep on using it to pay off

your tuition and books and things like

that now the last private loan is gonna

be that guy rec to consumer loan now

this one can actually run you into a lot

of trouble and has very high interest

it's not associated with the school and

it's dispersed straight to the student

which means you can you have a maximum

of course that you can borrow but you

can still borrow a substantial amount

you can use it on whatever you want to

use it on you don't necessarily have to

use it on tuition and books like you

should you could go out and buy that

brand new pair of jeans or whatever that

you want which is not always a good

thing but what I really don't like about

it is the fact that you really have to

pay attention to how much financial aid

that you have already so if you go out

and get a direct-to-consumer loan and

you borrow more than you need then you

can actually be billed by your school

they can take your grant they can take

your scholarships they can take pretty

much anything they can take your lower

interest loans away now let's talk pros

and cons with the federal loan you can

temporarily postpone payments if you may

be having financial need to not pay

right now or you're going through

something sometimes you can even get rid

of your payments altogether if you go

into a certain career field with the

private loan there's no forbearance or

deferment with a federal loan there's a

subsidized version with a private loan

you have to pay interest with a federal

loan there's also a fixed interest but

with the private loan there's a variable

interest so you might start

at 2% and get up to like 29% by the time

it's time just pay back with a federal

loan you have six months after you

graduate to start paying unless you go

less than half time with a private loan

you actually have to pay for a wire in

school they're not willing to wait so I

hope this has been a very informative

video for you guys I hope you guys

learned a lot if you guys have any

questions on anything that I discussed

or you want to know about something else

make sure to put that down in the

comment box down below and I'll see you

guys in my next video like rate comment

and subscribe guys bye