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Different Kinds of Student Loans in the US

Student loans are on of the ways students finance their post-secondary education. Generally a blend of scholarships, grants, parents, work, and student loans are used to pay for all costs of college or university. Your expenses will include tuition, books, housing fees and other expenses associated with going to college.

There are several kinds of student loans that can be issued to a new student. The most common type found is the federal loan. This financing have smaller limits, and are frequently restricted to paying for tuition fees only. The federal student loans are tightly regulated by the government, and can be acquired through the college’s financial aid program. They typically have very small interest rate, and the student does not need to start repaying the finances owed until they have either finish school or have fallen to only going to college half time.

When a student goes to apply for federal student loans, there are several things that should be remembered. First, there is typically a six month grace period associated with these types of loans. This means that from after the time the student graduates or has fallen to half-time attendance, they will not have to start returning money to the loaner for six months. Interest, however, begins growing as soon as you finish school college or have fallen to half-time attendance. All payments and amounts owed affect the student’s credit rating.

There are also student loans that are granted to parents rather than to the student. These loans have higher maximums, and the interest rate may also be higher than the federal student loans that tend to be issued. Interest also begins to accrue immediately. This is due to the fact that the parents is the one responsible for the loan, not the student. This method does not help improve the student’s credit rating.

Finally, there are non federal student loans. These go outside of the government regulated process, and are frequently saved for those who need more than the amounts granted to standard students. Private loans have the greatest maximums, and may also come with the highest of interest percentages as well. Private student loans are granted either to the parents or the students, and can be done through a variety of institutions as well as private loaners. This option is usually utilized by those going to really high cost colleges where federal cash is not enough. Students can use both private and federal student loans at the same time if necessary.

Remember, it is the repayment of these loans in the future that you have to keep on the horizon. Minimizing the loan amount to begin with will mean shaving years off of your student loan payments. Even if you get scholarships but rely heavily on loans, you’ll still feel the pinch when you get your degree. Also, don’t think interest doesn’t accumulate once you’re done your degree, you have to think well in advance how you’ll start immediate payments.

About the Author Lester Tines, his web site on student loans. Also visit for more resources.

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