Student Loans 101
An Introduction To Student Loans
One of the many ways to finance your college education is through taking out a loan. There are loans
available specifically to cover the cost of higher education.
Types of Student Loans
Student loans can be categorized by who determines the terms and conditions of the loan. Guidelines for
some loans are determined by the federal government. These are called federal student loans. Sometimes
the funds for federal student loans comes directly from the federal government. Banks can also fund federal
student loans. In this case, terms and conditions of the loan are still governed by the federal
government.
The second type of student loan is private student loan. These loans, and their associated terms, are
provided by private banks.
Applying For Student Loans
To apply for federal student loans, you only need to fill out a FAFSA, or Free Application for Federal Student
Aid. The application requests personal identifying information like your name, address, and social security
number, along with information about your school attendance for the upcoming school year. You should fill out
the type of degree you'll be obtaining, your grade level, and the type of degree you will be seeking. The
application will request financial information for you and your parents to determine the types of aid you are
eligible for.
The application process for private loans is less stringent; however, the requirements to get approved for a
loan are stricter than with federal student loans. Private student loan lenders check your credit history and
income before approving you for a loan.
In both cases, lenders check to make sure you will actually be attending school before giving you the loan.
Student Loan Costs
The cost of a student loan is applied as interest. The lower your interest rate, the lower the cost of
your student loan. It's important to know that interest begins accruing on your student loan as soon as you receive
it. With some federal student loans, the government pays the interest as long as you are in school.
With other kinds of student loans, you are responsible for paying student loan interest while you are enrolled in
school. There are options for deferring interest payments until after you graduate. If you choose to
defer interest payments, the interest will be added to the balance of your loan, increasing the total amount you
owe.
Repaying Your Student Loans
After you graduate school, you typically have a six month grace period before payments are due on the
loan. Once this grace period has ended, you must begin making regular payments on your student loan to remain
in good standing with the lender. It's wise to call your lender before the end of the grace period to find
out the amount of your monthly payment and any repayment options available.
Resource:
The Scholarship Book 12th Edition: The Complete Guide to Private-Sector
Scholarships, Fellowships,Grants, and Loans for the Undergraduate (Scholarship Book) For those
who dream of a college education and need money to make it happen--now with a CD-ROM.
More than a million copies sold.
The Scholarship Book, 12th Edition, is the first and most acclaimed guide to private-sector scholarships,
grants, and loans published in America-helping countless students locate, apply for, and receive private-sector
financial aid related to every major field of study.
In this new edition-complete with an expanded table of contents and an array of new scholarship sources presented
for the very first time-students will find the single most comprehensive listing of private-sector awards offered
by a wide range of corporations, unions, trust funds, religious and fraternal organizations, associations, and
private philanthropists, all eager to provide them with the financial assistance they need to continue their
education.
This invaluable resource gives students essential tips for determining which awards they qualify for, helps them
write winning essays, applications, and cover letters, alerts them to scams and rip-offs, and provides useful lists
of recommended websites and publications.
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