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Art School Loans
The two types of loans available to college students are federal loans and private loans. Both have their strengths and weaknesses, and many students decide to utilize a mix of the two to pad their college funds. Since you're not limited to only one, it's a good idea to do some research and understand both kinds before signing the papers.
Federal loans are so named because they are guaranteed by the U.S. Department of Education, either directly or through affiliated agencies. This allows for some student-friendly terms: the governments sets a bar for interest rates, the loans are available to almost every student regardless of credit score or financial history, and there is a six month grace period, which means that no payments are required until six months after graduation. There are also forms of assistance for those struggling to pay even after this grace period, including deferment and forbearance. However, the downfall of federal loans is their relatively low limit. As of June 1, 2007, freshman undergraduates are eligible for no more than $3,500, sophomore for $4,500, and juniors and seniors for $5,500. For graduate students, the limit is increased to up to $12,000, depending on the type of federal loan and the area of study.
Federal loans fall under two broad categories. Subsidized loans are granted based on the financial need of the student in question, and for as long as you remain enrolled in college either full-time or half-time, no interest accrues while you study! Or rather, the federal government pays the interest for you. It's an amazing deal, because if you go start off borrowing $3000 to enter college, you owe $3000 and not a penny more by the time you graduate.
In other cases where the student fails to qualify, loans are unsubsidized. Interest does accumulate during your years in college; you are, however, still eligible for the six month grace period.
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