Student loans, in plain language

Nobody should sign for tens of thousands of dollars without understanding it. Here are the four kinds of loans, in the order to consider them — after grants, scholarships, and work-study, which you never pay back.

1. Direct Subsidized

Take this first

6.52% fixed

For undergrads with financial need (the FAFSA decides). The government pays your interest while you're in school and for 6 months after — so a $5,000 loan is still $5,000 at graduation. If you're offered this, it's the best loan on the table.

2. Direct Unsubsidized

Take this second

6.52% undergrad · 8.07% grad, fixed

Available to any student, no need requirement. The catch: interest starts growing the day the money arrives, even while you're in school. Still safer than private loans — same federal protections, no credit check, no cosigner.

3. Parent PLUS

Think carefully

9.07% fixed + ~4.2% fee

A loan your parent takes out in their name — they're legally on the hook, not you, and it can't be transferred to you later. Higher rate, an upfront fee, and it can strain a family that's already stretching. Have the honest conversation before signing.

4. Private loans

Last resort

varies with credit

From banks and credit unions. The rate depends on credit history (which many first-gen families are still building) and usually needs a cosigner. You lose federal protections like income-driven repayment and forgiveness programs. Compare at least three offers if you go here.

What would it actually cost?

Pick a loan type, put in an amount, and see the real monthly payment after graduation. This is the number to know before you borrow — not after.

Loan typeAmount borrowed ($)Interest rate (% per year)Years to repay: 10The standard federal plan is 10 years. Longer means a smaller monthly payment but more interest overall — drag the slider and watch both numbers.

Monthly payment

$114

Total you'll pay back

$13,638

Of that, interest is

$3,638

■ what you borrowed ($10,000) ■ what interest adds ($3,638)

Estimates only, for standard fixed-rate repayment — your servicer's numbers are the official ones, and income-driven plans work differently. Federal rates shown are for loans first disbursed July 1, 2026 – June 30, 2027; federal loans also deduct an origination fee (~1.1% for Direct, ~4.2% for PLUS) before the money arrives. Current rates and terms: studentaid.gov.