Student Loan Info
Student loans are loans offered to students or their parents to assist in payment of the costs of education. Students loans usually have lower interest rates than other loans, and are often issued or guaranteed by the government.
While included in the term "financial aid", Higher Education Loans differ from scholarships and grants in that they must be paid back. They come in several flavors in the United States: Federal Student Loans made to students directly in which no payments are made until after graduation, but amounts are quite limited. Then there are Federal Student Loans made to parents: which have a much higher limit, but payments start immediately. Private Student Loans made to students or parents: have higher limits and no payments until after graduation. Unsubsidized federal student loans are also guaranteed by the government, but the government does NOT pay interest for the student, rather the interest accrues during college - if you borrow $10,000, you'll owe $10,000 PLUS INTEREST when you graduate.
Notice
The accrued interest will be "capitalized" into your loan amount, and you'll start making payments on that total. For example you might have borrowed $10,000 and had $2,000 accrue in interest. After graduation, your loan amount would become $12,000. Interest would start accruing on that amount and your payment will be based on that amount. You may also choose to pay the interest while you're in college (probably a smart move if you can come up with the money), in which case you graduate with just your baseline debt. PRIVATE STUDENT LOANS These are simply what they say. Loans made to students by private finance companies; sometimes banks, sometimes specialized education lenders.
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