| A student loan is a loan that is granted to a | | | | This saves a tremendous amount of interest in |
| college student enrolled in courses full or part time | | | | the long run, since a student loan repayment plan |
| for at least one semester or quarter and who | | | | can extend over 25 years depending on the loan |
| have declared a major with the intent of pursuing | | | | balance. Those students with an extremely low |
| a degree of higher education. Student loans can | | | | student loan balance ($5,000 or less) usually only |
| be granted through various lenders with a | | | | have the typical 5 or 10 year repayment option. |
| governmental guarantee, or can be granted from | | | | A student loan is eligible to be used for tuition, |
| private lenders with no guarantee. Some student | | | | books, on campus housing and childcare expenses. |
| loans do not require a parent's signature, while | | | | Some student loans allow for the purchase of an |
| others do. The government guaranteed student | | | | automobile to get to and from school, or other |
| loan is classified by two types, subsidized and | | | | pertinent school materials such as a computer or |
| unsubsidized. | | | | to pay off other student loan debt. |
| The subsidized student loans have a yearly limit | | | | Many students today are counting on student |
| and allow for the government to pay the interest | | | | loans for their education. What they are not |
| on the loan while the student is in school. The | | | | realizing when they sign the student loan |
| unsubsidized student loan allows for a higher | | | | promissory note is the debt they are incurring for |
| yearly limit, but the student must pay the interest | | | | a very long time after their schooling has been |
| while in school, or the accrued interest will be | | | | completed. The average student loan balance is |
| added onto the balance of the loan and is the | | | | upwards of $50,000 for a four year degree. Add |
| responsibility of the student during repayment. A | | | | to that professional education costs, and some |
| student loan can be deferred while the student is | | | | students will have over $150,000 in student loan |
| in school half time indefinitely. Private student loans | | | | debt. While the investment of an education is |
| usually have a set period of deferment, 2-5 | | | | always a wise idea because investing in one's mind |
| years, and then the student must begin | | | | will never diminish in value, the costs associated |
| repayment regardless of whether or not they | | | | with this investment and the income expected to |
| have completed their education. | | | | earn should be carefully evaluated. Some careers |
| Currently, student loans have the best interest | | | | do not warrant a high enough salary to repay the |
| rates in town. As the interest rate index rises, so | | | | loans. Grants and scholarships should always be |
| will the student loan rate. During low rate times, | | | | considered as alternatives to obtaining student |
| many scramble to consolidate their student loans. | | | | loan debt. |