Unfortunately, most Financial Aid comes in the form of education loans, which must be repaid with interest, as opposed to grants and scholarships, which do not.
401kid categorizes education loans into five main categories, the last two of which are not associated with Financial Aid –
- U.S. Government Loans: Loans backed by the U.S. government, such as Stafford Loans (for students) and PLUS loans (for parents).
- U.S. State Loans: Loans back by states, which vary greatly from state to state.
- Campus-Based Loans: Institution-backed loans that are sometimes subsidized by the federal government.
(non-Financial Aid loans)
- Private Loans: Non-government backed loans from private banks.
- Consolidation Loans: Typically post-education strategy for consolidating multiple loans with a current or new provider at a new, potentially lower interest rate.
Federal law sets the maximum interest rates and fees that lenders may charge for federally-guaranteed loans. Nothing prevents a lender from charging lower fees. Many lenders offer a variety of student loan discounts to attract borrowers.
Most students cannot afford to pay for college without some form of education financing. Graduate students typically borrow even more than undergraduate students to make it through.
Top 3 FAQs on Education Loans
[sponsored by Education Loan sponsor – Wachovia? – w/ logo]