• federal student and parent loans (loans provided by the government through your college)
• private student loans (provided by VSAC and other lenders)

Generally, there are three types of education loans that families use to cover college expenses:

Federal Stafford loans — available to undergraduate, graduate, or professional degree students.

Stafford loans are either:

• subsidized: for students with financial need. The U.S. Department of Education pays the interest while the student is enrolled and during a six-month grace period after graduation, and during any periods of deferment.
• unsubsidized: for any student, regardless of need. The U.S. Department of Education does not pay the interest for you.

Students might receive one type of Stafford loan or a combination of the two. Colleges usually package the maximum federal Stafford loan available (the amount depends on the student's year in school).

Federal Parent and Grad PLUS loans — available to parents of dependent undergraduate students or to graduate students.

Some colleges package the federal PLUS loan in their awards, and some don't. Either way, parents can use this loan to make up the difference between the total cost of college and other financial aid. Graduate students can use this loan to supplement funds available through the Stafford loan. Before a parent or grad student takes a PLUS loan, the student should borrow the maximum available in federal Stafford loans, because the rates are lower and the terms are better.

Private student loans — non-federal loans that may be available through:

• the college
• your bank
• a lending institution such as VSAC

Learn more about VSAC’s fixed-rate private education loan for students.

In the spring of 2010, Congress made changes to the federal education loan program. As of July 1, 2010, organizations such as VSAC can no longer make new Stafford, Parent PLUS, or Graduate PLUS loans. Your school’s financial aid office will help you obtain federal loans from the Direct Loan Program. Refer to your school’s Web site or contact your financial aid office to learn how to request a new Stafford, Parent PLUS, or Graduate PLUS loan.

If you are a Vermonter, you may be eligible to apply for a Vermont grant. Explore www.vsac.org to learn more about VSAC services.