College Student Loans

College student loans are a form of financial aid that must be repaid, with interest once a student graduates. (Scholarships and grants, on the other hand, do not have to be repaid.)

Education loans come in three major categories: student loans ( Stafford and Perkins loans), parent ... more info

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... loans (PLUS loans) and private student loans.

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.

Few students can afford to pay for college without some form of education financing. Two-thirds (65.7%) of 4-year undergraduate students graduate with some debt, and the average student loan debt among graduating seniors is $19,237, according to the 2003-2004 National Postsecondary Student Aid Study (NPSAS).

Graduate and professional students borrow even more, with the additional debt for a graduate degree ranging from $27,000 to $114,000.

Grants, scholarships, work-study and other forms of gift aid just do not cover the full cost of a college education. Many students find that they must supplement their savings with government and private loans. The Federal education loan programs offer lower interest rates and more flexible repayment plans than most consumer loans, making them an attractive way to finance your education. You can also deduct up to $2,500 in student loan interest even if you don't itemize deductions on your income tax return.

Once you have graduated, another type of education loan is the student loan consolidation. When you have multiple student loans from a variety of lenders, you can consolidate your loans to a lower interest rate and save thousands of dollars over the life of the loan.

The federal government would only allow federal student loans for students who were enrolled in a traditional college or taking at least 50% of their online classes at a campus location. This policy changed in 2007 and now federal student loans are available for students who want to earn their degree online from an accredited institution such as University of Phoenix , AIU Online , Devry University , Keiser University Online and St Leo University Online .