Federal and Private Loans for Kentucky College Students

Find Trustworthy Sources

Very few students go to college without student loans. Many must have a few different types of loans and they may be from a number of different sources. Where do you start? If you are a student or parent and resident of Kentucky you’ll find one of the best resources for undergraduate, graduate and parent loans may be found right in your own backyard.

The Kentucky Higher Education Assistance Authority (KHEAA) has been helping state students plan their college educations for years. This should be a go-to resource. Use KHEAA to help you:

  • plan your financial strategy
  • fill out the FAFSA
  • learn about state scholarships and grants

Types of Student Loans Available to Kentucky Students

You’ll discover two types of student loans: federal and private, or alternative. Federal loans are those guaranteed by the government and either loaned directly – the Direct Loan program – or loaned from a student loan provider as part of the Federal Family Education Loan Program (FFELP).

Private loans are those loaned by private student loan providers or banks. But federal loans always come first.

FAFSA and Federal Loans: Your First Step

Federal loans come first. Don’t make the mistake many students make when they opt for private student loans first. Private loans made directly from banks and private lenders often have risky interest rates and high fees. These are also credit-based so you’ll have to show stellar credit or borrow with a co-signor.

Federal loans are much more affordable and most don’t require a credit check. Better yet, almost everyone qualifies for some level of aid.

Begin by completing the FAFSA, the Free Application for Federal Student Aid. Miss the deadline and you are out of luck. Here is a brief outline of the federal loans:

  • Stafford loans are by far the most disbursed student loan in the country. You could qualify for subsidized, unsubsidized or a combination of both. This program has undergone a facelift in the last few years, making it more affordable and a best-bet when it comes to financial aid. Staffords feature a 6-month grace period, flexible repayment and low fixed interest rate.
  • Grad PLUS Loans are designed for graduate students that have reached the lifetime borrowing limit on their Staffords, but still need aid to make it through graduate studies. Some programs, like med and law school, are financially intensive.
  • Parent PLUS Loans give parents of undergrads a bit more affordable financial leverage than a traditional home equity line of credit or second mortgage. This does require a credit check, but features lower fees and interest rates than other products.

Find out more about federal student loans. For more information on student loans for Kentucky residents visit the KHEAA website.