Comparing Student Loans

What Loans are Best for You?

	PLUS Loan	Subsidized Stafford Loan
Borrower	Parent/Guardian	Student
Interest	8.5% for loans after July 1, 2006	6.8% for loans after July 1, 2006
Is the rate variable?	No	No, but Congress can increase the interest rate for new loans
Loan repayment term	The repayment term usually is 10 years.	10 years
Eligibility criteria	Credit-based - you can borrow up to the cost of education if you pass the credit check.	Need-based loan. Your school will determine your eligibility.
Credit check?	Yes, a credit check is done to determine if you're eligible	No
Interest rate cap	8.5%	8.5%
Discounts
Prepayment penalties	No penalties for paying it off early	No
Eligible for consolidation?	Yes - you can consolidate as soon as the loan enters repayment	Yes
Annual loan limits	Borrow up to 100% of college costs, minus any financial aid awarded	Undergraduates: 1st Year - $2,625 2nd Year - $3,500 3rd Year- $5500 4th Year-$5500 Graduates: $8,500
Total loan limit	Borrow up to 100% of college costs, minus any financial aid awarded	Undergraduates - $23,000 Graduates - $138,500
Origination fee	3%	3% *
Guarantee fee	Up to 1%, though often waived	1% *

* For Stafford loans, these values are frequently waived. A zero fee is dependent upon school preference for guarantor. Check with your school for more information.

** The Education Resources Institute, Inc. ("TERI"), a non-profit education loan guaranty agency, is the guarantor of the ACT Education Loans Program.