In the U.S., study loans, commonly known as student loans

 In the U.S., study loans, commonly known as student loans, are a significant financial tool for funding higher education. They are offered by the federal government, private lenders, and sometimes institutions themselves. Here’s a detailed look at the types of student loans available, how they work, and key considerations:

### **Types of Student Loans**

#### **1. Federal Student Loans**

**a. Direct Subsidized Loans**

   - **Eligibility**: Available to undergraduate students with demonstrated financial need.

   - **Interest Rates**: Fixed and subsidized by the government, meaning interest does not accrue while the borrower is in school at least half-time, during the grace period, or during deferment.

**b. Direct Unsubsidized Loans**

   - **Eligibility**: Available to undergraduate, graduate, and professional students. No financial need requirement.

   - **Interest Rates**: Fixed, with interest accruing while the borrower is in school and during other periods.

**c. Direct PLUS Loans**

   - **Eligibility**: Available to graduate or professional students and parents of dependent undergraduate students. Requires a credit check.

   - **Interest Rates**: Fixed, with interest accruing from the time of disbursement.

**d. Direct Consolidation Loans**

   - **Purpose**: Allows borrowers to combine multiple federal student loans into a single loan with a fixed interest rate based on the weighted average of the interest rates on the loans being consolidated.

**e. Federal Perkins Loans** (Note: Discontinued as of 2017)

   - **Eligibility**: Offered to students with exceptional financial need. The school was the lender.

#### **2. Private Student Loans**

**a. Offered by Banks and Credit Unions**

   - **Eligibility**: Based on creditworthiness, income, and other factors. Not based on financial need.

   - **Interest Rates**: Can be fixed or variable, often higher than federal loan rates.

   - **Terms**: Varies by lender and may include different repayment options and benefits.

**b. Institutional Loans**

   - **Eligibility**: Offered by some colleges and universities, typically to fill gaps not covered by federal aid.

   - **Terms**: Varies by institution.

### **Key Aspects to Consider**

#### **1. Interest Rates**

   - **Federal Loans**: Fixed rates determined by the government and generally lower than private loan rates.

   - **Private Loans**: Rates vary by lender and can be fixed or variable. Variable rates may change based on market conditions.

#### **2. Repayment Plans**

   - **Federal Loans**: Offer various repayment plans, including Standard, Graduated, Extended, Income-Driven Repayment Plans (IDR), and Income-Based Repayment (IBR).

   - **Private Loans**: Repayment terms vary by lender and may include options such as deferred payments while in school or income-based plans.

#### **3. Loan Forgiveness and Repayment Assistance**

   - **Public Service Loan Forgiveness (PSLF)**: For borrowers in qualifying public service jobs who make 120 qualifying payments under an IDR plan.

   - **Teacher Loan Forgiveness**: For teachers who work in low-income schools and meet other criteria.

   - **Income-Driven Repayment Forgiveness**: Remaining balance forgiven after 20-25 years of qualifying payments under an IDR plan.

#### **4. Loan Application Process**

   - **Federal Loans**: Apply using the Free Application for Federal Student Aid (FAFSA). Based on the results, you’ll receive a financial aid offer from your school.

   - **Private Loans**: Apply directly through lenders, which may require a credit check and possibly a co-signer.

#### **5. Borrowing Limits**

   - **Federal Loans**: Have annual and aggregate borrowing limits based on your year in school and dependency status.

   - **Private Loans**: Limits vary by lender and may cover the full cost of education minus other financial aid.

#### **6. Loan Servicing**

   - **Federal Loans**: Serviced by various federal loan servicers, and borrowers can manage their loans through the servicer’s website.

   - **Private Loans**: Serviced by the lender or a third-party servicer, with management through the lender’s portal.

### **Repayment and Management**

**a. Deferment and Forbearance**

   - **Deferment**: Temporarily postpones loan payments under specific conditions (e.g., while in school or experiencing economic hardship).

   - **Forbearance**: Allows for temporary suspension or reduction of payments due to financial difficulties.

**b. Loan Consolidation and Refinancing**

   - **Consolidation**: Combines multiple federal loans into one, simplifying payments.

   - **Refinancing**: Available through private lenders, it can combine federal and private loans into a new loan with potentially different terms.

**c. Financial Management**

   - **Budgeting**: Create a budget to manage loan payments and other expenses.

   - **Automatic Payments**: Set up automatic payments to avoid missing due dates and potentially qualify for interest rate reductions.

Understanding student loans and managing them effectively can help minimize financial stress during and after school. Be sure to research all options, compare rates, and consider long-term financial impacts before borrowing.