On the other end, students can receive loans from private institutions as an alternative to federal loans; these loans are formally known as private student loans. Since they are from private institutions, a competitive market has developed that drives interest rates and loan packages which provides better options overall to the potential borrower.
Multiple payment period plans and payment options are available in contrast to the more rigid options offered by the federal government.
Since student loans are such a hot topic, it pays to know more about the different types of loans available to students.
Starting with federal student loans, two different types of federal loans are available: subsidized and unsubsidized loans.
Let’s say you have fifty thousand dollars in federal loans.
A subsidized loan is desirable to the borrower because the government makes interest payments while the beneficiary is still in school; a subsidized loan will save money at the expense of the government.
On the contrary, an unsubsidized student loan is less desirable because no government interest payments are made which makes the loan more expensive to the borrower.
I haven’t met a single person with student loans who doesn’t want them gone as soon as possible.
It’s hard enough to start a career or raise a family, and when a large chunk of your income is going toward student loans every month, it can feel downright impossible.