By javeria, on November 21st, 2010
Student Loan and Student Loans
A student loan is a
loan that is granted to a college student enrolled in courses
full or part time for at least one semester or quarter and who
have declared a major with the intent of pursuing a degree of
higher education. Student loans can be granted through various
lenders with a governmental guarantee, or can be granted from
private lenders with no guarantee. Some student loans do not
require a parent’s signature, while others do. The government
guaranteed student loan is classified by two types, subsidized
and unsubsidized.
The subsidized student loans have a yearly limit and allow for
the government to pay the interest on the loan while the student
is in school. The unsubsidized student loan allows for a higher
yearly limit, but the student must pay the interest while in
school, or the accrued interest will be added onto the balance
of the loan and is the responsibility of the student during
repayment. A student loan can be deferred while the student is
in school half time indefinitely. Private student loans usually
have a set period of deferment, 2-5 years, and then the student
must begin repayment regardless of whether or not they have
completed their education.
Currently, student
loans have the best interest rates in town. As the interest
rate index rises, so will the student loan rate. During low rate
times, many scramble to consolidate their student loans. This
saves a tremendous amount of interest in the long run, since a
student loan repayment plan can extend over 25 years depending
on the loan balance. Those students with an extremely low
student loan balance (,000 or less) usually only have the
typical 5 or 10 year repayment option. A student loan is
eligible to be used for tuition, books, on campus housing and
childcare expenses. Some student loans allow for the purchase of
an automobile to get to and from school, or other pertinent
school materials such as a computer or to pay off other student
loan debt.
Many students today are counting on student loans for their
education. What they are not realizing when they sign the
student loan promissory note is the debt they are incurring for
a very long time after their schooling has been completed. The
average student loan balance is upwards of ,000 for a four
year degree. Add to that professional education costs, and some
students will have over 0,000 in student loan debt. While the
investment of an education is always a wise idea because
investing in one’s mind will never diminish in value, the costs
associated with this investment and the income expected to earn
should be carefully evaluated. Some careers do not warrant a
high enough salary to repay the loans. Grants and scholarships
should always be considered as alternatives to obtaining student
loan debt.
For more information about student loan and student loans,
visit: http://loans.christianet.com
http://loans.chr
istianet.com/articles.htm http://www.christianet.com
Christian N, http://www.ChristiaNet.com
http://blogs.christianet.com
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