| There are many ways for students to finance a | | | | for a loan. |
| college education, but one of the most common | | | | |
| ways is through taking out a loan. There are | | | | With both federal and private lenders, they |
| loans specifically designed to cover the cost | | | | will confirm that you will actually be |
| of higher education. | | | | attending school before granting you the |
| | | | loan. |
| Types of Student Loans | | | | |
| | | | Student Loan costs |
| Federal student loans have terms and | | | | |
| conditions that are determined by the federal | | | | The rate of interest applied to the loan |
| government. Federal loans may come directly | | | | determines the cost of the loan. The lower |
| from the federal government. Banks can also | | | | the interest rate, the less the loan will |
| issue federal student loans. | | | | cost you. |
| | | | |
| Private student loans and their associated | | | | Be aware that interest begins accruing on |
| terms are issued by private banks. | | | | your loan as soon as you receive it. If you |
| | | | have a federal loan, the government may pay |
| Applying for Student Loans | | | | the interest whild you are in school. With |
| | | | other types of loans, you are responsible for |
| To apply for federal loans, prospective | | | | paying the interest while you are enrolled in |
| students need to complete a FAFSA, or Free | | | | school. There are options for deferring |
| Application for Federal Student Aid. This | | | | interest payments until after graduation, but |
| application will request personal information | | | | if you choose to defer these payments, the |
| such as your name, address, and social | | | | interest will be added to the balance of your |
| security number. It will also require you to | | | | loan, thereby increasing the total amount |
| submit information about your plans for | | | | owed. |
| school attendance for the upcoming year, | | | | |
| including the type of degree you are working | | | | Repaying Student Loans |
| to obtain and your grade level. Lastly, the | | | | |
| application will request detailed financial | | | | You usually have a six month grace period |
| information from you and your parents to | | | | after graduation before you must begin making |
| determine the type of aid you will be | | | | payments on your loan. Once the grace period |
| eligible for. | | | | ends, you must make regular payments on the |
| | | | student loan if you want to remain in good |
| When applying for a private student loan, the | | | | standing with the lender. You should contact |
| application process is less detailed. | | | | the lender prior to the end of the grace |
| However, the requirement for loan approval | | | | period to determine the exact amount of your |
| are stricter than with federal loans. | | | | monthly payments and to learn what options |
| Private lenders will check your credit | | | | are available to you. |
| history and your income before approving you | | | | |