• federal student and parent loans (loans from or guaranteed by the federal government)
• private student loans

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 or 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 PLUS loans — loans that parents can borrow to help pay education costs for a dependent student enrolled in an undergraduate program.

Some colleges package the federal Parent PLUS loan in their awards, and some don't. Either way, parents can use this type of loan to make up the difference between the total cost of college and other financial aid. Before the family borrows a PLUS loan, the student should borrow the maximum in federal Stafford loans, as those terms will be more favorable.

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

• the college
• your bank
• an institution such as VSAC

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

Congress recently 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 borrow federal loans from the Federal 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.