While included in the term "financial
aid" higher education loans differ from scholarships and grants in
that they must be paid back. They come in several varieties in the
United States:
- Federal student loans
made to students directly: No payments while enrolled in at least
half time status. If a student drops below half time status, the
account will go into its 6 month grace period. If the student
re-enrolls in at least half time status, the loans will be
deferred, but when they drop below half time again they will no
longer have their grace period. Amounts are quite limited as well.
- Federal student loans made to
parents: Much higher limit, but payments start immediately
-
Private student loans made to students or parents: Higher limits and no payments until after graduation, although interest will start to accrue immediately. Private loans may be used for any education related expenses such as tuition, room and board, books, computers, and past due balances. Private loans can also be used to supplement federal student loans, when federal loans, grants and other forms of financial aid are not sufficient to cover the full cost of higher education.