5 Loans That Can Help You Avoid Student Debt Crisis

Kelsey Bowersox
May 22, 2023
Student Loan Debt Crisis

Disclaimer: Penny Calling Penny is an affiliate website. This means that we get a small commission when you click some of the links in this article. Don’t worry – we’ll never recommend anything we wouldn’t use ourselves.

What is that exactly? The Student Debt Crisis started as early as 2018. By 2019, almost %11 of students were delinquent on their payments. Now, the cumulative amount of student debt is more than 1.7 trillion. That’s a lot of money! The crisis continues to be a problem as more and more students seek a higher education yet can’t find ways to pay off that debt in our economy. So how do you prevent yourself from becoming another statistic on this ever growing problem? You’d be surprised to hear that one of the things that may help you stay on track with your payments is the loan itself.

So, you get a loan to stay out of debt? It makes a lot more sense than it sounds but, yes. Student loans are different from each other. Some have lower interest rates; others have grace periods, and some have both. So, what are the best personal loans for you? Using Credible can help you find the best deals on student loans, but it’s useless if you don’t understand what these loans actually are.

Grants and Scholarships

To start us off, there are grants and scholarships to help you with paying off that ever growing student debt. These are rewarded to students who usually only have to write an essay or perform an outstanding deed. The best thing about grants and scholarships is that you don’t have to pay them back, so rack them up as quickly and as many as you can. Then, to repay the remainder of your debt, you need to borrow a loan.

Student loans come in many different shapes and sizes.

Types of Student Loans

Different types of student loans that will truly help you to overcome student loan debt crisis are:

Private Loans

Private Loans are the most expensive and have a higher interest rate. On top of all that, you usually have to start paying them while you’re still in college. This makes them a lot harder to pay off. The one good thing about them is that they have decent forgiveness plans.

Most private loans come from banks and institutions that you can find on a lender list. The school should be able to provide this list to you. When you find a lender, it’s also best to make sure the loan they’re offering applies to your situation. For example, some private loans only provide money for graduate programs.

Don’t forget to compare lenders to see which ones offer you the best deals. Then, you can choose how much you think you’ll be able to pay off. Private Loan lenders like to see that you have a good credit score, which might be a factor in how much you can take out.

Federal Loans

The government issues these loans, and unlike private loans, these are typically smaller and with lower interest rates. The downside is that forgiveness on these loans is non-existent, so if you fail to pay them off, the government can withhold taxes, garnish your wages, and so on. You usually need to have more than one Federal Loan to pay off a student debt. Always remember you can consolidate your loans to make it easier for you to pay them back. Federal Loans are the best kind of loans to consolidate since they all come from the same lender—the government. There are different types of Federal Loans.

Subsidized Loans

Subsidized loans are the best bet for a new student. Not only does the US Department of Education pay the interest while the student is in school, but most of the time, they also provide a 60 day grace period, so you have a little bit more time to find a job before you need to start paying your debt. This is crucial for any student wanting to pay off their student loans quickly. With a little extra grace from the government, it becomes easier.

Unsubsidized Loans

These loans are very much the same as subsidized loans. The only difference is that you are required to pay the interest during your schooling and grace period. While this does help the student by not requiring them to pay until after the grace period, it still will add interest if not paid during your schooling. Nonetheless, if you’re able to find a student job, you’ll be able to quickly cover those small costs and more. Even a small gig such as Swagbucks may get you enough money to pay off interest, and all you have to do is answer surveys.

Parent Plus Loan

Maybe if you have a really cool parent, they will agree to help pay off some of your debt with a parent plus loan. These loans are technically not your debt. They’re your parents. While this may sound like a dream come true, let’s take a closer look at these types of loans. Firstly, they are not co-signed. The parent of the child is entirely responsible for the debt. They have the lowest fixed interest rates out of all the loans on the list. They are also not subsidized, so they will keep accumulating interest throughout any grace period.

What’s even more unique about Parent Plus Loan, besides the fact that it’s technically not your debt, is that there is more room for forgiveness if something were to happen and you couldn’t pay off your debt. But, of course, this isn’t your debt we’re talking about, which is why it’s essential not to put your parents in financial jeopardy just because you want to go to college.

What Is Best For You?

Picking the right kind of debt is beneficial to keeping you out of debt. You’ve seen from the Federal Loans that you can get a head start in paying them off, yet they are not without drawbacks. Parent Plus Loans are a great way to save money if your parents agree to it. Private loans though they have great forgiveness, can be costly if you’re not careful.

Now that you have a better idea of what you’re doing go ahead and pick out the best student loans for you, and don’t forget to keep up with your payments.


Your Financial Success Starts Here


Actionable Tips and Freebies Delivered Straight to Your Inbox! Subscribe Now!

(By subscribing, you agree to our terms & conditions, privacy policy, and disclaimer.)

You May Also Like

Was this article helpful? We'd love to hear from you!

Notify of
Inline Feedbacks
View all comments


save 10000 in 26 weeks printable

Are you up for the challenge of saving $10,000 in 26 weeks?

save 10000 in 26 weeks printable

Are you up for the challenge of saving $10,000 in 26 weeks?

This printable tracker will guide you week by week to reach your goal of saving $10,000. Whether you’re planning a big purchase or building an emergency fund, this tracker will keep you on the right path.

(By subscribing, you agree to our terms & conditions, privacy policy, and disclaimer.)

check your email


Your Printable is en route!

Check your promotion, junk, and spam folders: Sometimes, our emails can end up in unexpected folders.


Team Penny Calling Penny!

(By subscribing, you agree to our terms & conditions, privacy policy, and disclaimer.)