Student loans for higher education
An student loan is a kind of financial aid that must be paid back with interest.
One type of student loan or education loan, is the consolidation loan. A consolidation loan allows the
borrower to combine all their loans into one lump sum, simplifying payment. However,
that is just one example of education loans. Education loans are basically divided
into these three primary categories:
-Student loans (Stafford and Perkins loans) -Private student loans (alternative student loans) -Parent loans (plus loans) |
Federally guaranteed loans Federal law sets maximum interest fee/rate on federally-guaranteed loans that prevents lenders form over charging borrowers. A lender may charge any interests rate they wish on federally-guaranteed loans. So long as the rates or falls below or meets the maximum federally set rates. There is nothing preventing lenders from lowering their fees and rates. In fact many lenders often offer education loan discounts, to attract borrowers. Statistically only a small percentage of students can afford to pay for collage without some sort of financial help. So unless you received a scholarship or a grant you’ll need to find a financial institute that is willing to give you a loan. |
Graduating with debt It is not uncommon to graduate collage with some debt. According to the 2003-2004 National Postsecondary Student Aid Study (NPSAS), two-thirds of undergrads graduate with debt. The average federal student loans (Stafford and Perkins) debt among senior graduates is around $19,000 (the median being around $17,000). One quarter of undergrads borrow $25,000 or more, leaving one tenth borrowing $35,000 or more. These figures increase be about 3% (or about $550) a year. When including Parent loans (plus loans) into the equation the average accumulative debt incurred is almost $22,000. About 1 in 10 parents will borrow Parent loans (plus loans) so that their children may get a collage education. Such loans usually have an accumulative debt of around $16,000. |
