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Student Loans For Your College Education

Written by  Pearl M. Kasirye Nov 17, 2020

American college education can get unrealistically expensive. Not everyone can afford to pay over $20,000 a semester to go to university.

Student loans are federal loans given to American citizens to finance their education with the idea that students will repay these loans within 10-20 years after graduation.

There’s a lot of controversy surrounding the student debt crisis in the United States. To make the decision to get student loans should not be taken lightly.

In this brief guide, you’ll learn more about the different types of student loans, how to repay them, and how these policies could change under a new American government.

Types of Student Loans

Keep in mind that a student loan is money borrowed that must be repaid with interest. This is an important factor when considering which student loan to take.

Student loans can be made by a school’s financial aid department, the federal government, or banks and private organizations. Depending on the source, the benefits and interest rates may differ.

According to Federal Student Aid, federal student loans are more beneficial than private loans from banks and other private organizations.

These are the types of federal loans available to students - 

I. Direct Consolidation Loans - You can combine all your federal student loans into a single loan.

II. Direct Subsidized Loans - These are designed for undergraduate students with demonstrated financial need.

III. Direct PLUS Loans - These are designed for graduate students and parents of undergraduate students to pay for expenses not covered by an institution’s financial aid package

IV. Direct Unsubsidized Loans - These are available to undergraduate and graduate students even without demonstrated financial need.

You can borrow as much as $12,500 per year with federal student loans depending on your year in school and how dependent you are on your parent/guardian.

Graduate students can borrow up to $20,000 per year depending on the type of loan they choose.

For more information about student loans from banks, private organizations, or your institution, carefully read the department’s website. Make sure that you have answers to your questions about eligibility, interest rates, and loan amounts.

Repaying Student Loans

Before taking out student loans, ensure that the payments are manageable. Look into the payment plans available depending on your loan provider. This will greatly impact how fast you can pay off your debt.

With most student loan providers, you are given a “grace period” before you have to start repaying them. This timeframe may range between 3-6 months depending on your loan provider.

Once this period is over, you must start repaying your loans because it will negatively affect your credit score if you miss any payments.

You have the option of using payment plans for federal student loans. Some federal loans use income-based repayment plans that are based on the percentage of your income.

This ultimately means that you pay a manageable amount per month and you don’t stretch yourself too thin. You can learn more about this repayment plan here.

Final Thoughts

Please read!

Research and learn as much as you can before committing to any form of student loans. Keep in mind that student loan policies change over time.

In fact, whoever becomes the new president of the United States will have different policies to implement regarding federal loans.

It’s important to know how politics could also influence student loan debt and repayment policies. To learn more about this, read this brief guide.

Stay informed and stay positive!


Author Bio 
Pearl M. Kasirye is a writer at Pearl Lemon, editor, and researcher who spends most of her time reading. When she isn’t reading or working, she can be found sitting on her balcony writing her own novels or traveling.


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