High school is the last stop we must make before we officially become adults. Deciding what to do after high school is not an easy decision. Some students take all 4 years to decide if they will head into the work force right away, or gain more education by heading off to college. Should a person decide that college is the next step, they now must figure out how to pay for that education. One way to help pay for the rising cost of college tuition is to look into AES student loans.
AES loans are designed to help students pay for school, in a time when tuition costs have become unaffordable for many. There are several different types of loans to help a variety of situations.
Types of AES Loan Services
- Federal Stafford loan – The most popular type of loan is the Federal Stafford loan because the interest rate is very low, 1.91%. It does not need to be repaid until the student has graduated from college and has a job. On top of that, should the student work for the government after college, part of the loan is forgiven every year the student stays with the government, including the Military and the National Guard. This type of loan is taken out by the student and he/she will be responsible for repaying it when the time comes.
- Perkins loan – This type of loan, which is need based, is offered by the Department of Education. The Perkins loan’s interest rate is 5% and is paid back over 10 years. This loan is also taken out by the student. The student will be responsible for paying this loan back.
- PLUS loans – These loans are taken out by the parents or guardians. The biggest perk to this type of loan is that there is no penalty for paying this loan off early.
- Private loans – Should a student not qualify for federally funded programs, then a private loan is another option. Or these loans can supplement federal funds should a student need more than what he/she received. With the rising cost of college, many students end up utilizing both types of loans. The interest rates for these vary and may depend on the credit score of the student taking out the loan, or of the person who cosigns.
An AES Student Loan Payment can be made in several different ways.
- Income Based - This type of payment is good for a person who does not get a high paying job right out of college. Most loans payments are broken up in to a certain amount, based on how many years the loan is going to be, for example 30 years or 10 years. If you cannot afford that amount, you may want to look into an income based loan that will take your current income into account.
- Extended – Most loans are set up to be paid back over an average of 10 years. An extended payment plan takes those payments over a longer period of time, up to 30 years. This will significantly lower your payment, however be aware you will end up paying back much more, due to more money going towards the interest.
- Standard – Overall this type can save you the most money. This student loan AES payment allows you to pay back the minimum or more than that amount allowing you to pay it back faster. Most people pay their loan back in an average of 10 years.
- Graduated – If you go with a graduated payment plan, your payments start of lower and gradually increase over time. The nice part about this type of payment schedule is that when you graduate you may not make very much money. You may not get a job in your field right away or even if you do, it could be an entry level with a minimal salary. The goal of course is that as you gain experience you will get promoted or find jobs that pay more money. Once you are making more money, you will be able to afford more of a payment. You may pay a little more in terms of interest, but the goal will still be to pay it off as planned.
- Income Sensitive – These types of loans are not the best option available, but depending on your situation, it could prove to be beneficial. This type of payment plan allows you to pick what percentage of your income goes to the loan. Something to be aware of is that since you will be paying less upfront you will have more to pay at the end and more will go to interest.
Knowing which type of loan is best for you, and which payment method are things that an AES Loan Servicing group can help you determine. There are many options available to help you attend the college of your choice.