Many people fund a child’s college education from their savings and with grants and scholarships. However, they may still need to borrow money to cover all of their college expenses. Student loans can help fill this gap.
Student loans allow for money to be borrowed for education related expenses and they are required to be repaid within a certain timeframe. The key things to consider for students loans are where to get them, who does the borrowing, and what the terms and rules are for paying them back.
Most loans are taken out directly by a student, though some can be taken out by parents. The loans tend to come from three different sources:
- The federal government
- Individual states
- Private lending institutions
Before you apply for and take out a student loan, make sure you understand the terms of the loan, when you need to pay it back, and what other requirements and exceptions might exist.