Student loan Advice

A student loan is designed to help students pay for university tuition, books, and living expenses. It may differ from other types of loans in that the interest rate may be substantially lower and the repayment schedule may be deferred while the student is still in education. It also differs in many countries in the strict laws regulating re-negotiating and bankruptcy. Student loans have become an indispensable tool for families trying to pay the soaring cost of higher education, which at some private colleges and universities now tops $50,000 a year. The interest rate paid by students on both guaranteed loans and direct loans is fixed and is set by Congress. In the case of guaranteed loans, the government pays a subsidy to lenders that make the loans and also guarantees the amounts loaned, almost completely protecting lenders from losses. Education builds up the steps to success. A higher education not only translates one’s investment into material achievements and mental contentment but also enriches one’s knowledge and enlightens one’s mind. The qualified persons are more immune to economic turbulence. But degrees come at a cost and so can not be afforded by all. Education loans come in three major categories: student loans (e.g., Stafford and Perkins loans), parent loans (e.g., PLUS loans) and private student loans (also called alternative student loans). There are different layers of economic background. In fact, the model based upon the financial status is a pyramid in shape. A few are rich and seated at the crest of the pyramid whereas the countless paupers form the very basement and the other classes are categorized in between. The types of loans available fall into three general categories: federally guaranteed loans made by banks and other lenders; federal direct loans made directly by the government; and private loans, which are essentially the same as any other consumer loan, from banks and other companies.