This post is published as a Web extension of our August 2012 Education Issue – our annual blow-out of all things educational. To read it in full, visit our e-store to purchase a copy or subscription.
By Kelli Bennett, Editorial Intern
How does a 1 percent interest rate sound for a student loan? Georgia Student Access Loan has made this unfathomable interest rate possible. These surfacing low-interest loans can be attributed to the falling interest rates. Numerous companies, state programs, and foundations are offering alternative education loans that are cheaper than some of the federal government's offerings.
Nothing is Perfect
Unfortunately, these loans do not offer income-based repayment and student loan forgiveness. Whitehouse.gov defines income based loan repayment as a repayment plan that caps your required monthly payments on the major types of federal student loans at an amount intended to be affordable based on income and family size. This plan is devised to lower monthly payments for borrowers with high loan debt and modest incomes.
Student loan forgiveness is defined by FinAid.org as a program where the federal government will cancel all or part of an educational loan. In order to qualify for Loan Forgiveness a student must perform volunteer work; perform military service; teach or practice medicine in certain types of communities or meet other criteria specified by the business program.
These new low-interest rate loans present another layer to the decision-making process. Nevertheless, the new loans may help a struggling college student out immensely. In an economy where student loans are vital to completing education, this is a matter of selecting the lesser of two “evils.”
Good luck and happy student loan searching.
Browse the detailed chart belown compiled by CNN Money to see which low-interest student loans are best for you.
Low-interest alternative student loans
|Georgia Student Access Loan||Students in Georgia with a 2.0+ GPA who have exhausted all other aid programs, including the parent PLUS loan.||1.00%|
|Pickett & Hatcher Educational Fund||Students with a 2.0+ GPA and a cosigner.||2% while in school, 6% after graduation|
|Questa Foundation||Students from Northeast Indiana who have a 2.75+ GPA. Those who graduate and work in the area can get up to 75% of the loan forgiven.||3.25%|
|Dakota Education Alternative Loan - North Dakota||Students from or attending college in North Dakota with cosigner with credit score of at least 575.||4.6%|
|Dakota Education Alternative Loan - Regional||Students from or attending college in South Dakota, Minnesota, Montana, Wyoming or Wisconsin with cosigner with credit score of at least 575.||6.27%|
|SoFi||Students attending participating colleges. No cosigners needed. Some forgiveness possible.||6.38%|
|RISLA Immediate Repay Loan||Students from or attending college in Rhode Island. Cosigner needed, but eligible for release after 24 on-time payments.||6.39%|
|RISLA Deferred Repayment Loan||Students from or attending college in Rhode Island. Cosigner needed, but eligible for release after 24 on-time payments.||7.49%|