American College Funding

Loan Central

Perkins Loans
Stafford Loans
PLUS Loans
Alternative Loans
Private Loan Options

Perkins Loans                                           Back to Top

Formerly known as National Direct Student Loans (NDSL), Perkins Loans ar the best of the federally subsidized student loans. The current fixed rate is 5%, and there is no origination fee. These loans are made strictly to the student, and there is no need, or indeed opportunity, for the parent to cosign. Payment begins only after the student graduates or drops below half-time status.

Perkins Loans are designed to accommodate the most needy students and are less commonly disbursed than many other government funds. They offer extremely low interest rates, very long term repayment options, and larger sums of money disbursed to the borrower. However, your EFC, or Expected Family Contribution, as determined by the FAFSA, must show substantial need for students to qualify. 
How do you know if you qualify for a Perkins Loan?

As with all other financial aid awards, you will need to fill out the standard FAFSA form that is used to qualify you for all federal funding opportunities. Like other federal loans and grants, Perkins Loans must be reapplied for every academic year.

Loans are available for both undergraduates and graduates who are seriously financially disadvantaged. Undergraduates are eligible for up to $4,000 per year, with a total maximum of $20,000, while graduate students may receive a maximum of $40,000.

As long as students remain enrolled in at least half-time study programs, repayment is deferred. Upon completion of the program and/or graduation, or if the student drops below half time, there is a 90 day grace period, after which payments become due.

A standard Perkins Loan will have a repayment period of approximately 10 years, though extreme hardship may warrant a lengthening of terms. Since the loan is disbursed directly through the college you attend, you may want to contact the financial adviser at the college regarding a deferment or lengthening of your terms.

Although the money comes from the govenment, these loans are administered through the college financial aid office.

The federal government gives the college a lump sum each year, but the FAO decides which students receive the money and how much they receive, based on need. These, and all other awards, are made on a first-come, first-served basis.

Perkins Loans are eligible for Federal Loan Cancellation for teachers in designated low-income schools, as well as for teachers in designated teacher shortage areas such as math, science, and bilingual education. A percentage of the loan is cancelled for each year spent teaching full-time. This cancellation also applies to Peace Corps Volunteers. Cancellation typically occurs on a graduating scale: 15% for year 1, 15% for year 2, 20% for year 3, 20% for year 4, 30% for year 5. These percentages are based on the original debt amount. Thus after 3 years of service, one would have 50% of their original debt cancelled.

Perkins loans, and subsidized Stafford loans are considered to be part of the family's "need."

Stafford Loans                                           Back to Top

A Stafford Loan is a student loan offered to eligible students enrolled in accredited American institutions of higher education to help finance their education. The terms of the loans are described in Title IV of the Higher Education Act of 1965 (with subsequent amendments), which guarantees repayment to the lender if a student defaults.

In 1988, Congress renamed the Federal Guaranteed Student Loan program the Robert T. Stafford Student Loan program, in honor of U.S. Senator Robert Stafford, a Republican from Vermont, for his work on higher education.

Stafford Loans are loans that are guaranteed by the government. There are versions of the loan available for both undergraduates and graduate students, available in varying amounts and under a number of different circumstances and criteria that are met.

Stafford Loans come in two varieties: the subsidized Stafford Loan and the unsubsidized Stafford Loan. Subsidized are less common and are made to those who present extreme financial hardship based on completion of the FAFSA. The interest on Subsidized loans is paid by the federal government while the student is in school, during the grace period, and during authorized deferment.

Much more common are the unsubsidized Stafford Loans, in which the student will be responsible for the interest on the loan. However, students are not obligated to begin repayment of any portion of the loan until a six-month grace period beyond graduation has ended. For unsubsidized Stafford Loans, students are responsible for all of the interest that accrues while the student is enrolled in school. The interest may be deferred throughout enrollment. Unpaid interest that is deferred until after graduation is capitalized (added to the loan principal).

Like the Perkins Loans, Stafford Loans are true student loans. They are made to the student, not the parent. Further they do not require the parent to cosign in order to qualify for the loan.

Unlike subsidized Stafford Loans which have stringent financial need requirements, there is no such restrictions on unsubsidized Stafford Loans. You must still complete and submit the FAFSA form, but there is no financial aid limitation to the unsubsidized Stafford Loan program. Any student may qualify for up to the allowed maximum, however they are distributed based on availability and the cost of your college or university program. So that government can offer some funding to most parties, these amounts tend to also be small, though less restricted than subsidized loans, and are distributed on a first come, first served basis.

Maximum amounts for Stafford Loans are $5,500 for freshmen, $6,500 for sophomores, and $7,500 for the remaining udergraduate years, though for all of these annual limits $2,000 of any Stafford loan award must be unsubsidized.

Both subsidized and unsubsidized Stafford loans have lower interest rates than typically available on the open market, and the government makes up the difference. Currently rates for subsidized loans are fixed at 3.4%, and unsubsidized rates are fixed at 6.8%.

As mentioned above, Perkins loans and subsidized Stafford loans are considered to be part of the family's "need." Unsubsidized Stafford loans as well as PLUS loans are meant to help families cover the Family Contribution.

PLUS Loans                                           Back to Top

Subsidized by the United States government, PLUS (Parent Loans for Undergraduate Students) loans is made to the parents of college children. Almost any parent can get a PLUS loand of up to the total cost of attendance minus financial aid, provided the federal government considers the parents a good credit risk.

These loans should not appear as part of your aid package, however some colleges do include PLUS loans and unsubsidized Stafford loans in their awards packages. This is unfair and should be watched out for. If this does happen, you should realize that the college isn't really meeting your need by including in that package an instrument you would have qualified for anyway. An award that does include these loans is not a good as one that does not.

With PLUS loans, payment normally begins 60 days after the loan is taken. However relatively new legislation allows PLUS loan borrowers to defer repayment until the student graduates, leaves school, or drops below half time. Notify the lender if you wish to defer repayment.

Though it is very easy to get into trouble with these loans they are probably the best of the credit-based parent loans. Parents may borrow up to the total cost of attendance minus any financial aid received. Though in the past some have carried variable interest rates, PLUS loans distributed after June 30,2006 carry fixed interest rates. All PLUS loans are now disbursed by the the Direct Loan Program and must be applied for through the college financial aid office. The maximum interest rate is fixed at 7.9%.

Though they are credit-based loans, the credit test for PLUS loans are not as strict as those for other commercial loans. You don't have to have excellent credit to qualify; you just can't have an adverse rating. New legislation even provides special treatment for families who have had trouble paying mortgages and medical bills. Finally, provisions can be made for extenuating circumstances or for a credit-worth cosigner.

In the case that you cannot qualify for a PLUS loan, your student may qualify for extra Stafford funds over the normal borrowing limit. First- and second-year students may be able to get $4,000 more per year, and upper classmen and women may be able to get $5,000 additional Stafford loan funds.

Alternative Loans                                           Back to Top

There are a number of sources from which you can obtain alternative student loans, with some offering better terms than others. The number one thing to remember is that, when working with private lenders, you shouldn't expect to get the best interest rates, since banks and other financial institutions focus on profiting from lending money. That means that, if you are going to make use of such sources, you need to shop around for the best rates and the lowest fees.

On the other hand, most states have a sanctioned party that offers alternative student loans that are similar to federal funding, using the same tax exempt state educational bonds to fund these programs so that they can pass on a great deal of savings to consumers. Such loans typically have very low interest rates, are free of lending fees, and have flexible, long-term repayment options that are similar to or even better than those offered through federal plans.

These student loans are going to be credit-based, meaning that students who apply will need to have a good credit history or a co-borrower with excellent credit and a low debt-to-income ratio. Most are contingent upon students being enrolled at least half time in school and do not require repayment until the end of a six month grace period beyond graduation. Many offer further interest rate cuts as a reward for continuous on time payment or for direct withdrawal payments. These terms can also include the ability to release your cosigner after a certain period of time.

Private Loan Options                                           Back to Top


A variety of loans are available to make up the difference between available funds (including grants, scholarships and savings) and college costs. If you have decided to apply for loans you should consider the combination of loans that will be right for your family. You have options that include Federal Stafford Loans, the Federal PLUS loan and Private Student Loans. Below is a list of national lenders American College Funding clients have had success with in the past. We also recommend checking with your local bank or credit union to compare loan terms and interest rates before accepting a private loan.

DISCOVER STUDENT LOAN (Discover Financial Services)
Ph: 1-877-728-3030/ website:


  • Zero fees and interest rates as low as prime plus 1.00%

  • Borrow up to 100% of college costs minus other aid, based on school certification

  • Easy, secure online applications with immediate credit decision
  • Zero payments until 6 months after graduation or enrolment in college less than ½ time (6 credits)
  • No income requirement so you can focus on your studies.
  • Co-signers help students get approved & get a lower interest rate to save a lot of money.
  • Only available to U.S. citizens or permanent residents with a Social Security number
  • Only available for students enrolled in a 4 or 5 year undergraduate program seeking a degree
  • Must maintain satisfactory academic progress



  • 2% cash reward on the outstanding principal balance of private loans at graduation

  • No Loan Limits- borrow 100% of college costs minus other financial aid
  • No co-signer required, but adding one may improve chances for loan approval and may lower the interest rate
  • Easy online account management 24/7; live operator also available 7 days per week.
  • 0.25% repayment interest rate reduction when payments are setup for automatic debit from bank account
  • Loan is certified so interest paid can be tax deductible


Interest rate

  • Interest rates are variable and based on the Prime Rate- range from Prime plus 1.00% to Prime Plus 7.75%

  • Manage your credit well and get a low interest rate.



  • Zero origination fees

  • Zero guarantor fees
  • Zero Prepayment fees



  • Repayment starts 6 months after graduation or enrollment drops below half-time

  • 15 year repayment period
  • Prepay your loan at any time without penalty.


Ph: 800-STUDENT/ website:


1. Competitive interest rates – Variable from 5.125% to 11.875%
2. Interest rate reduction of 0.25% for auto-debit payments
3. No payments while in school
4. Easy online application. Credit response in 3 minutes or less (during restricted hours)
5. Borrow up to the full cost of education less any other financial aid received
6. Flexible repayment options
7. Co-signer may be released from the loan if the borrower has made the first 24 consecutive monthly payments on-time and is a credit-worthy, U.S. citizen or permanent resident at the time the release is requested.
8. Access and manage account through secure web site anytime
9. Loan is Certified so interest paid can be tax deductable


  • Be enrolled or planning to attend an undergraduate program at least part-time at an accredited, approved college or university in the U.S.

  • Must be at least 18 years of age, 19 in AL and NE, 21 in MS
  • Your co-signer, if applicable, must be a U.S. citizen or permanent resident with a mailing address based in the U.S. and have a valid Social Security Number.
  • International students must be at least 18 years of age and must have a co-signer who is a U.S. citizen or permanent resident with a valid Social Security Number.


Loan Limits:

  • There are no annual loan limits. You can borrow up to the cost of education less any financial aid you have received. Your school will be asked to certify the amount for which you are eligible, so the final approved loan amount could be less than the amount that you request.

  • There is a one time minimum loan amount of $1,000.



A loan fee may be added to the principal balance. Adding a creditworthy cosigner may help you qualify for a loan with no fees.

Repayment Terms:

  • No Payments While In-School

  • CitiAssist Loans do not require payments while you're in school or during the six month grace period. If interest is not paid while you are in school, it will be capitalized once the loan enters into repayment.
  • You can choose to pay interest in order to lower monthly payments after you complete school. There are no prepayment penalties.


Flexible Repayment Terms

  • Undergraduate students have up to 15 years to repay their CitiAssist Loans plus

  • any periods of deferment or forbearance.
  • Variety of repayment plans to fit your unique financial situation
  • Should you experience financial difficulty, re-enroll in school, or join the military a Citi loan specialist will work with you to find the best solution through deferment or forbearance.


Ph: 888-272-5543/ website:


  • Loan will be available for classes that begin on or after June 1, 2009

  • Monthly interest only payments are required while you are in school and during the 6 month separation period.
  • Must attend an eligible community college, four or five-year college or university or graduate program at least half time
  • Easy, secure online applications with immediate credit decision and electronic signature.
  • Co-signers help students get a lower interest rate and save a lot of money.
  • Available for U.S. students in study abroad programs.
  • Available to international students with an eligible cosigner.
  • Principle and Interest payments start 6 months after graduation



  • By making interest payments while in college the borrower will graduate with less debt

  • High approval rates.
  • Co-signers help you qualify for a lower interest rate and can be removed from loan obligation after you complete your education (you'll need to meet credit requirements).
  • High aggregate loan limits so you can borrow as much as you need to pay for school.
  • Easy online account management 24/7.
  • Convenience of having all your student loans in one place and receiving one monthly bill when your Stafford loans are serviced by Sallie Mae.
  • 0.25% interest rate reduction for automatic debit
  • 0.25% interest rate reduction for providing a valid e-mail address to receive all servicing communications


Loan terms

  • Borrow up to the total cost of attendance minus other financial aid received $1,000 minimum loan amount

Interest rate

  • Interest rates are variable and reset monthly based on the one-month LIBOR index

  • Manage your credit well and get a low interest rate.



  • Disbursement fees range from 0%- 5%

  • No repayment fee



  • Monthly interest-only payments required during the school period and 6-month separation period

  • Paying interest in school avoids capitalized interest and reduces total cost of loan and length of repayment
  • Can make principal and interest payments begin following the six-month separation period
  • Prepay your loan at any time without penalty.


Ph: 1-800-487-4404/ website:


  • No Payments required while in school

  • No origination of repayment fees for most applicants
  • Loans from $500 up to the total cost of attendance (minus other aid) each year
  • May be used to cover previous school balances
  • Maximum aggregate balance of $120,000 for undergraduate students
  • Can apply by phone or online and can be conditionally approved within seconds
  • May electronically sign loan documents online or request paper documents to be mailed
  • Once documents are received the school can receive funds in as little as 5 business days
  • 0.25% interest rate reduction available to borrowers in repayment for automatic deductions
  • Cosigner can be used to receive a lower interest rate
  • Cosigner can be released from the loan after 36 consecutive payments of principal and interest are paid on time



  • Borrower must be an undergraduate or graduate student at least 18 years of age or older in a degree or certificate program

  • Attending a participating school
  • U.S. Citizen or permanent resident
  • International student with a qualified U.S. citizen or permanent resident cosigner


Repayment Options:

  • Immediate Repayment: Repayment of principal and interest begins 15 to 45 days after final disbursement date

  • Deferred Principal and Interest: Principal and interest repayment begins 6 months after graduation or are no longer enrolled at least half-time in school
  • Interest Only: Interest payments begin 15 to 45 days after the final disbursement date, payments on the principal and interest begin 6 months after graduation or are no longer enrolled at least half-time in school
  • No fee for early prepayment or repayment


Interest Rate:

  • Variable based on 3 month LIBOR Index + margin from 4.75% to 12.25%

Feel free to contact ACF for any questions:


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