Student Loans For Your College Education

Paying for your college education with student loans is a good option, provided you understand what you are doing.

Before you apply for either federal student loans or private student loans, you should have researched and applied for scholarships and college grants.

Remember, you don't have to repay money you are awarded for educational grants or college scholarships. You do have to pay back the money you have borrowed for student loans.

Student loans are offered by both the Department of Education and by private lending institutions.

Department of Education student loans are commonly referred to as "government student loans", "federal student loans", and "Direct student loans". Since July of 2010, all student loans backed by the Department of Education are known as Direct Loans.

Direct loans are low-interest loans for students and parents to help pay for your the cost of your college education.

There are two types of Direct Loans:

- Direct Subsidized Loans for which you don't pay any interest while you are in college.

- Direct Usubsidized Loans for which you do pay interest while you are still enrolled in school.

Advantages of Direct Loans include:

- Low interest rates.

- You can select from several different repayment plans and change plans for free at any time.

- Have online access to your Direct Loan account 24/7.

- If you have several Direct Loans, you can consolidate them into one Direct Consolidation Loan.

Private Student Loans

The other student loan option is to borrow money from a bank or lending institution. You should consider private student loans after you have applied for scholarships, college grants, and Direct Student Loans.

There are many lending institutions that provide college student loans. In some cases the interest rates can be much higher than the Direct Student Loans.

If you need to pursue student loans through private lending sources, make sure that you do your research and use major banks and lending institutions that you can trust. SimpleTuition - the smart way to choose student loans.

Find out what the interest rates and repayment options are before you sign an agreement to borrow money. Some lending institutions may require you have a co-signor, such as a parent or guardian.

Private student loans tend to cost more than Direct Student Loans and your credit score and credit history may determine your eligibilty for a private student loan.

Student Loan Summary:

Look for low-interest student loans that have flexible repayment plans. Only borrow from lenders that you can trust. Pursue the Direct Loans through the Department of Education before you approach a private lending institution.

Remember, you do have to repay both Direct Student Loans and private student loans. If you don't repay your loans in full and one time, you can go into default which will affect your credit score and could impact your ability to establish credit and borrow money in the future.