Oregon student loans can be a crucial tool for making your college dreams a reality. As you begin this exciting chapter of your life, understanding the ins and outs of student loans will be key to managing your current and future finances and securing the necessary funding for your education.

In this post, we'll explore the various aspects of student loans in the Beaver State and provide valuable insights to help you make informed decisions about financial aid for students.

Understanding Different Types of Student Loans in Oregon

College is expensive. Student loans can bridge any financial gaps you may have.

Learning about the different kinds of student loans available is crucial — so you know what you're signing up for when you borrow money for your education. The two main kinds of financial aid we'll look at are federal student loans and private student loans. These are both available to Oregon students.

Federal Student Loans

Federal student loans can be a viable form of financial assistance for students who want to pursue higher education but lack the cash on hand to make it happen. In Oregon, federal student loans are a common source of funding for tuition, fees, and other student expenses.

Before choosing one loan over another, it's a good idea to understand the various federal student loan options, such as Direct Subsidized Loans, Direct Unsubsidized Loans, and Direct PLUS Loans. Each type of federal student loan comes with its own terms, conditions, and eligibility criteria, which can significantly impact your financial obligations in the future.

Federal Student Aid

Here's a quick overview of loans the federal government currently offers.

There are several types of federal student loans available to students in the United States. Each with its own specific features and eligibility requirements:

• Federal Direct Subsidized Loans. This is a need-based loan that can be taken out by undergrads. If you have this kind of loan, the government pays the interest while you're in school at least half-time and during the grace and deferment periods.
• Federal Direct Unsubsidized Loans. This type of loan enables undergraduate and graduate students to borrow money, regardless of financial need. Interest accrues until the loan is fully repaid.
• Federal Direct PLUS Loans. Graduate or professional students and parents of dependent undergrads are eligible for this loan. Your credit score and history will be checked and interest accrues for the life of the loan.
• Federal Direct Consolidation Loans. Students and/or parents who have multiple federal student loans and wish to combine them into a single loan, could qualify for a no-fee consolidation. The consolidated loan's interest rate is the weighted average of the interest rates of the loans you're consolidating.

For Federal Direct Subsidized, Federal Direct Unsubsidized, and Federal Direct PLUS loans, the amount you can borrow is based on the cost to attend your school. 

The size of a Federal Direct Consolidation Loan is determined by the outstanding debt of the individual federal loans being combined.

Private Student Loans

Private student loans are another funding pathway for Oregon students. If you've exhausted your federal student loan options or need additional financial assistance to cover your educational expenses — this may be an approach to consider for covering your college bills.

Unlike federal student loans, private student loans are offered by commercial financial institutions (e.g., banks or credit unions). These lenders usually require a credit check and students who have limited credit history or income might need a co-signer.

Private student loans may offer competitive interest rates and attractive repayment plans. However, terms and conditions of various private student loans and lenders run the gamut. Plus, generally speaking, private student loans are less likely to have the protections and benefits federal loans offer to borrowers (e.g., income-driven repayment plans, loan forgiveness programs, and deferment or forbearance).

The takeaway here is that you'll want to research the best options for your personal needs now and in the future. Before committing to a private student loan, we recommend taking advantage of all federal financial aid opportunities, scholarships, grants, and work-study programs. Doing so will minimize your need for shouldering more financing than necessary.

The Basics of Borrowing

To assess your financial aid options properly, some foundational knowledge may be helpful. Knowing the 101 of loans will facilitate decision-making and downstream management of your finances.

Understanding Loan Terms & Conditions

Terms and conditions lay out the specific contractual details of a loan. They include things like the interest rate, repayment schedule, and any additional fees or penalties. Below are some to consider when reviewing a loan:

• Interest Rates. The interest rate is what you’re paying the lender for the privilege of borrowing their money. It’s paid in addition to the amount of your loan (aka the principle). Understanding how interest accrues and affects the total cost of your loan is a must.
• Repayment Options. Various repayment schemes — like standard, extended, and income-driven plans — may be available.
• Co-Signers. A co-signer might not be necessary. But, when there is one, it’s vital to understand the conditions the co-signer is subject to.
• Fees. Some student loans may come with origination fees or other charges. These add to the lifetime cost of the loan.
• Grace Periods. Many student loans offer buffer time between graduation and the beginning of the repayment phase of your loan. Grace period conditions can impact financial planning.
• Penalties. Loans often assess fees for late or incomplete payments, which bump up the overall price tag on your student loan. (However, unlike some other kinds of loans, lenders aren’t allowed to penalize you for early loan repayment.)
• Deferment & Forbearance. Under certain circumstances, federal student loans usually allow you to temporarily postpone or reduce your loan payments. This flexibility can be incredibly valuable when trying to manage periods of financial hardship — like after a job loss.
• Loan Forgiveness. Some federal student loans release borrowers who work in public service (e.g., teachers) or are experiencing financial difficulty from their debt obligation.

Check with each lender to see what options are offered for the loans you’re considering. Knowing these provisions can be beneficial for your financial planning. Pick a student loan that aligns with your near-term and long-range needs.

Pros & Cons of Student Financial Aid

To help you evaluate which sort of loan might be better for you, check out this comparison table.

	Federal Student Loans	Private Student Loans
Eligibility Requirements	Must submit FAFSA; some loans based on financial need	Based on creditworthiness and financial history
Co-Signer Needed	Usually no; except for PLUS loans	Often required
Credit Score	No credit check for most federal loans	Most require a good credit score or a co-signer with good credit
Terms	Tend to be more flexible	Tend to be less flexible
Interest Rates	Fixed rates, generally lower	Variable or fixed rates; may depend on creditworthiness
Subsidies	Available based on financial need	Unlikely
Repayment Plan	Various options available including income-driven repayment plans	Standard repayment options, often lacking income-driven plans
Loan Forgiveness	May be eligible for various federal forgiveness programs	Unlikely
Loan Deferment/Forbearance	Options available for periods of financial hardship	Limited options, varies by lender
Total Cost (Loan + Interest)	Generally lower	Can be higher

How to Apply for Student Loans in Oregon

Fortunately, the days of tediously requesting interest rate quotes from individual lenders is a thing of the past. Technology has made searching and applying for financial aid faster and easier than ever before.

At Valley Credit Union, we make the whole process so simple. Thanks to our cutting-edge Student Loan Marketplace!

This free tool lets you input a few straightforward pieces of information and then curates lenders you're pre-qualified for. It'll also tell you if you need a cosigner, a steady income, etc. And don't worry — it doesn't expect that students will have an established credit history. 

The basic process is:

• Submit your completed form to see if you pre-qualify for a student loan.
• You'll get a report with loans/lenders you matched with so you can compare interest rates, repayment terms, and so on.
• You select a loan and repayment plan that suit your financial situation.
• Get your funds.
• Go to school!

Valley Credit Union, Supporting Oregon's College Students

In Oregon, student loans are a staple source of funding for college. However, becoming a savvy borrower is an education all of its own.

You have a lot of choices in how you finance school tuition and other expenses. Including VCU's private student loans in the mix could be a competitive way to make college affordable.

We're here to help you figure out how to pay for your higher education and can assist you when you're ready to apply for your student loan. Contact us today and take the next step.

About the Author​

 Justin Roberts, Vice President of Lending

Justin Roberts is our Vice President of Lending and has been in the financial industry for over 18 years. He is an Oregon State University Graduate and has just completed Western CUNA Management School. When he is not focused on helping the members at Valley, you will find him coaching his two sons and volunteering his time to help develop the youth in our communities through sports.