The price tag for college can be quite a shock. The good news is that if you haven’t saved up enough cash to pay for it all, you can apply for a student loan. The following student loan terms can help you better understand the process.
• Financial aid: Various programs or loans to help students pay for their college expenses and tuition.
• Federal student loans: Provide nearly 70 percent of all undergraduate and graduate student aid. Federal student loans are available to students enrolled in eligible programs at participating schools. In most cases, they’re granted based on a student’s need. One of the big pluses is that they don’t have to be repaid until after graduation; however, the amount available to borrow is limited.
• Private student loans: Available from private institutions, these loans usually have interest that begins to accrue immediately. However, they tend to have higher borrowing limits and in some cases may not require payments until after graduation. Private student loans are a good option for students who don’t qualify for federally funded loans.
• Federal Stafford loans: A very common student loan, Stafford loans are long-term, low-interest loans regulated by the federal government. They are granted based on financial need and given to students (rather than to their parents). Stafford loans must be repaid with interest following the completion of your education term.
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