Types of U.S. Student Loans
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Types of U.S. Student Loans

Looking for information on student loans that clearly explains what is available, how they work and which loan is the best choice for the student?

U.S. student loans fall into two types; federal and private, and to receive approval for the financial assistance requirements must be met.   Student loans are tools to manage the costs of education and the debt that comes with it. Many students count on a federal student loan to pay for their college education through one of the financial aid programs. That’s because federal loans typically have lower interest rates than a private student loan. 

Private student loans may require collateral or a joint guarantor for approval of the financial assistance. Depending on the type of loan, monthly payments can be minimized, loan terms can be negotiated and interested rates regulated. It’s up to the student to ask questions. Student loans may provide a variety of deferment options or extended repayment terms during the course study and after graduation.


College administrators should be the first point of contract when considering a student loan. They are knowledgeable of which student loan is available through the college and can help to identify which loan works best for the student.

Federal student loans are based on the student’s need for financial assistance. Private student loans may require a cosigner, which helps to expedite the loan process and makes the loan eligible for the best interest rate.


Federal loans require the student to complete and hold a high school diploma or General Education Development (GED) certificate and in some cases a test may be required by the U.S. Department of Education. The student must be a U.S. citizen or eligible noncitizen with a social security card issued from the United States.

Private loans are usually a form of addition financial aid for educational costs that are not covered with a federal student loan. Some of those additional costs may include books and computers or other educational expenses to complete a study course. Private loans do not require that a student have a financial need for the assistance, but the student must be creditworthy to qualify for the loan.


Students cannot be in default of a current federal student loan or federal student grant to be considered for an extension or consolidate student loan. Academic grades must be satisfactory throughout the course of the student’s education. Federal student aids have limitations that the funds can only be used for educational purposes.


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Comments (2)

nicely narrated.

Very useful and informative topic.thanks