Best Ways to Borrow Money for College
A quick guide to college loan programs.
If your student's financial-aid package is made up entirely of grants and work-study, with no loans, consider yourself blessed. If you have to borrow, start with the programs below. All but the institutional loans are backed by the federal government.
Row 0 - Cell 0 | Smart Ways to Pay for College |
Row 1 - Cell 0 | Everything You Need to Know About College Aid |
Row 2 - Cell 0 | Best Values in Public Colleges |
Perkins
Available only to students with exceptional need, Perkins loans carry a fixed 5% interest rate. Repayment begins nine months after graduation; until then, the federal government picks up the interest. If your student qualifies, the financial-aid award will say so.
Subsidized Staffords
Like Perkins loans, subsidized Staffords are need-based. Loans disbursed for the 2008-09 academic year carry a fixed 6% interest rate. The feds pay the interest until repayment begins, six months after your student leaves school. Borrowers can choose among several repayment options.

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Unsubsidized Staffords
Any student who applies for federal financial aid can get these loans, but interest starts accruing as soon as the loan is disbursed. The rate is fixed at 6.8%. As with subsidized Staffords, borrowers can defer repayment until six months after leaving school and choose among several repayment plans.
Parent Plus
You have to pass a basic credit check to get one of these loans, which carry a fixed interest rate of 8.5%. Repayment begins within 60 days of disbursement, but some lenders let you defer repayment until after your student graduates.
Institutional Loans
Offered or sponsored by the school itself, they can be a great deal -- or not. Examine the terms before you sign up.
For more information or to review a loan application, visit the U.S. Department of Education's Federal Student Aid site.
More on Kiplinger's
Best Values in Colleges & Universities
-
Stock Market Today: Tech Stocks Soar as AMD, Alphabet Rally
AI-related headlines sparked a major surge in tech stocks Thursday, with the Nasdaq handily outperforming its peers.
By Karee Venema Published
-
Six Steps to Take if You've Recently Inherited Money From a Loved One
It’s important to deal with the emotional aspect first before tackling the financial one.
By Kiplinger Advisor Collective Published
-
Four Tips for Renting Out Your Home on Airbnb
real estate Here's what you should know before listing your home on Airbnb.
By Miriam Cross Published
-
Five Ways to a Cheap Last-Minute Vacation
Travel Procrastinator? No matter. You can pull off a fun and memorable getaway on a moment's notice — without breaking the bank.
By Vaishali Varu Published
-
How Much Life Insurance Do You Need?
insurance Instead of relying on rules of thumb, you’re better off taking a systematic approach to figuring your life-insurance needs.
By Kimberly Lankford Published
-
When Is Amazon Prime Day?
Amazon Prime In 2023 Amazon had two Prime Day events — one in July and another, called Big Deal Days, in October. We expect 2024 to follow the same schedule.
By Bob Niedt Last updated
-
How to Shop for Life Insurance in 3 Easy Steps
insurance Shopping for life insurance? You may be able to estimate how much you need online, but that's just the start of your search.
By Kaitlin Pitsker Published
-
5 Ways to Shop for a Low Mortgage Rate
Becoming a Homeowner Rates are high this year, but you can still find an affordable loan.
By Daniel Bortz Published
-
Retirees, It's Not Too Late to Buy Life Insurance
life insurance Improvements in underwriting have made it easier to qualify for life insurance, which can be a useful estate-planning tool.
By David Rodeck Published
-
How to Benefit From Rising Interest Rates
Financial Planning Savers will get the best rates from top-yielding savings and money market deposit accounts at online banks.
By Rivan V. Stinson Last updated