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Student Loan Basics

student loan basics

These days it is almost impossible for most students to attend college without some kind of financial aid.

Most students who apply for aid receive student loans. There are two main sources for such loans; Private loans and Federal loans.

Private loans are issued by private banks and are based on the applicant’s credit worthiness, meaning, if you have good credit, you can get a loan.

Federal student loans, however, are not dependent on credit worthiness (except PLUS loans).

Instead, a complex formula is administered for all applicants to determine if they are eligible for aid through the federal government.

Read More: What’s the difference between Federal and Private student loans?