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