There are a couple of student loans that merit discussion. The first is a loan extended to a student that will use the funds to go to college. These types of loans have been around for many years. The student loans are usually at a lower than average interest rate. The majority of student loans are also somewhat flexible on the repayment schedule. Some students are paying for their student loans for many years after they finish college. The student loan has provided a way for someone to finance their education that may not have been able to go to college. The student loan business is more than likely experiencing difficulties like every other loan in todayís market.
There is another type of student loan that is obtained for a troubled teen school. It is sad that parents in many instances have used up any funds set aside for the troubled teen to go to college. It is even more discouraging that they will have to borrow money to fund a specialty boarding school. There used to be a handful of institutions that would extend student loans for troubled teen schools. With the recent economic crunch and difficulties on Wall Street they have all discontinued student loans for Specialty Boarding Schools.
Federal Student Loans
There are several places that can offer Federal Student Loans. Basically the term indicates that the student loan will be subsidized by the Federal Government. This allows payments to be smaller and deferred until a student can begin reaping higher pay as a result of their education. There are federal student loans that can be paid back many years after they are extended. The government is interested in helping educate our youth. The government realizes that without educating our youth we will not be able to compete in the global market.
Some students fail to pay their Federal Student Loans back. The government is flexible with the repayment of their loans, but they will take
action if someone refuses to pay them back. Here is a link to a site that facilitates Federal Student Loans: Ed.gov
Subsidized Student Loans
There are several companies that offer Subsidized Student Loans. The subsidized loan has flexibility of repayment and the interest is paid for by the Department of Education. There are qualifications that must be met to receive a subsidized student loan. There are income caps, minimum time enrolled in school criteria, unemployed time constraints, and some economic hardship criteria. The interest rates on some Subsidized Student Loans are variable and continue to stay variable even if the payment is in a deferred status.
There a couple of divisions of the government that can assist with the loan process. They come under the US Department of Education and are known as The Federal Direct Student Loan Program (FDLP and the Family Education Loan Program (FFELP). One advantage of the Subsidized Student Loan is the qualification process. The majority of those who apply will be granted a loan. The studentís credit score is not a factor with this type of loan. Some loans will allow the student to wait until six months after they have graduated to begin making payments. This allows the student to concentrate on school rather than how they are going to pay for it.
Private Student Loans
Private student loans are loans extended without any type of government assistance. It would seem foolish for someone to borrow private money to pay for college if they can get a subsidized loan. The exception may be someone
that makes too much money to qualify for a subsidized loan. This is fairly rare as most college age students donít make any money. If students are of legal age their parentís income and credit history is usually not a factor. If a private student loan is the only option the student should be sure they will be able to make the monthly payments. This could be a challenge especially for a full time student. It is very difficult to work full time and go to college. It is possible however, and many people have done it. If someone really wants to get an education, they will find a way to finance it and make everything work.