Education Loans
Whether they are referred to as “school loans“, “student loans” “college loans” or just “money for college“, the phrases all mean the same thing-money that is borrowed so that a person can obtain a higher education. And, there are almost as many types of education loans as there are names for them.
Many college-bound students use the Free Application for Federal Student Aid (FAFSA) form to apply for Federal Student Aid college loans. Examples of loans that can be applied for using a FAFSA are Pell Grants, Stafford loans, SMART (Science and Mathematics Access to Retain Talent) Grants and PLUS loans (loans that are taken out by a student’s parents) as well as others.
Some student loans are subsidized-that is, the Federal Government pays the interest for a certain amount of time, while others are unsubsidized-the student (or borrower[s]) is responsible for paying the interest that accrues on the loan. Some student loans do not require that any repayment be started until a certain time after a student leaves school (hopefully, because the student graduated). Others, such as the PLUS loan, offer the borrower(s) the option of beginning repayment immediately, or waiting until after the student has finished school.
It is also possible to apply for education loans through different lending institutions such as banks, credit unions, or other loan agencies. These types of loans are referred to as “private” loans.
How much money a student needs to borrow will, of course, depend on how much it will cost to attend college. Many colleges quote a “flat” amount per quarter, per semester, or per year, which includes books, tuition, housing, and other college expenses. When this occurs, the student usually has a fairly good idea of exactly how much he or she will need to borrow, and can decide whether to borrow year to year, or to apply for a lump sum that will cover all of the college years.
Many students know early on which college they would like to attend. Often, as the time gets closer, the prospective student will begin keeping track of tuition and other costs at the preferred college, and can tell if an increase seems likely. He or she can then begin to plan accordingly, especially when it comes to knowing how much to apply for in student loans.
Other colleges break down each category, and quote a separate amount for each one. One advantage of this is that if the student already knows that he or she will not need to worry about a specific expense (for example, he or she has already arranged for off-campus housing), he or she will then know that it is not necessary to apply for housing funds.  For this reason, the student may find that he or she can choose to look into obtaining a personal loan, rather than a Federal loan.
This may allow the student to “shop around” for the best interest rates, repayment terms, and other loan options that might not be available on other loans. It may also allow the student to borrow more money than he or she may have thought.
No matter how education loans are obtained, the important thing is for a student to realize that there is money out there, and it is available. It may take a few years to pay the loan back, and much of a student’s earnings the first few years after college may go to that particular debt. However, the student will have received something that is worth every cent of the money that was borrowed-a college education, with all the benefits and rewards that come with it.
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Tags: college loans, education loans, FAFSA, federal loans, Loans, money for college, PLUS loan, private student loans, school loans, Staffford loans, student loans, subsidized loans, unsubsidized loans
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