Private loans bridge gap between college costs, other student aid
College-bound students may be able to tap into many sources of financial aid to help pay for their education, including federal and state grants, scholarships and Federal Stafford and PLUS Loans. In addition, local scholarships are often available, according to the Kentucky Higher Education Assistance Authority (KHEAA).
Those programs can ease the burden of paying for college. However, they may not be enough to cover all the costs. When that happens, many people consider private student loans, also called alternative loans.
The interest rate on private loans will largely depend on the borrower’s credit rating. So, students and parents may have to pay higher interest rates than they would on federal student loans. In addition, many lenders require students to have a cosigner, and some require the college to certify that the student needs the loan.
Students and parents are encouraged to do research before committing to any loan. They should compare the loans offered by various lenders to find the best possible deal.
KHEAA is the state agency that administers Kentucky’s student financial aid programs, including the Kentucky Educational Excellence Scholarship (KEES). Its sister agency, the Kentucky Higher Education Assistance Authority (KHESLC), offers Kentucky Advantage Loans to help students and parents pay for college.
To find links to other useful education websites, go to www.gotocollege.ky.gov. For more information about Kentucky scholarships and grants, visit www.kheaa.com; write KHEAA, P.O. Box 798, Frankfort, KY 40602; or call 800-928-8926, ext. 6-7372.