Student grants loans
Student loans are aids given to students studying in high school, colleges or pursuing higher studies. Student loans can be aided by the government or by the private institutions. Student loans differ from scholarships in many ways. Student loans are repayable after a specified period of time. But scholarships are paid in the form of rewards and are not payable after a specified time.
Usually the student loans aided by the government carry a lower rate of interest compared to the loans provided by the private institutions. Student loans are provided for various levels such as undergraduate, post graduate and graduate level. Student loans can be categorized into Direct and Indirect loans. Direct loans are directly reimbursed to the parents of the student or the student himself. But the Indirect loans are provided to the school or the college where the student has enrolled his name.
Before applying for any type of loan a student has to fulfill certain criteria. Most of the loan providers expect that the student must have already enrolled himself to an institution as a full-time student. The student loans usually carry a very low rate interest compared to the other loans. Most of the student loans meet the additional expenditures such as food, traveling, conveyance etc.
Stafford Loan is the most popular type of loan provided to the undergraduate students. This loan can be categorized into two parts:
a. Subsidized
b. Unsubsidized.
This loan is provided to pay the tuition fees and the other expenses relating to education. Whether a student should apply for subsidized loan or unsubsidized loan depends upon his need.
Subsidized Stafford loan: Are those loans which are not accrued during the period of education. The interest of the loan is subsidized. It is not paid by the student when he is in school. This loan is provided to the student based on his need.
Unsubsidized loan: it is the loan that is provided by the student when he completes his education. It is not provided according to the needs of the students. The interest of the loan is accrued immediately after the student is disbursed to school.
In U.K. various types of loans are available and the main classification of loan are:
1. Federal students loans are directly paid to the student. They do not offer loan to the student if the student has not enrolled even for a half-time in school. The amount sanctioned by him is limited.
2. Federal loan can be paid directly to the parents also. The amount offered to him is high but the payment starts immediately.
3. Many types of private loans are offered. Their limit is very high but at the same time the interest rate is also very higher.
Student loans are offered in almost every country today. They have their own limits and terms and conditions. Usually the loan limits are higher in developed countries. The terms and conditions are more liberal in developed countries compared to the developing countries. Some of the student loans are supplemented with student grants and they need not be repaid.