Financial Literacy: Managing Student Loans

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Federal Student Loans: These loans are issued by the government and often come with benefits such as fixed interest rates, income-driven repayment plans, and access to loan forgiveness programs. Common types of federal loans include:

• Direct Subsidized Loans: Available to undergraduate students with financial need. The government pays the interest while you're in school.
• Direct Unsubsidized Loans: Available to both undergraduate and graduate students. The borrower is responsible for paying interest at all times, even while in school.
• Direct PLUS Loans: For parents of dependent undergraduate students or graduate students. These loans can cover the entire cost of education, including tuition, fees, and living expenses.

Private Student Loans: These loans are offered by private lenders, such as banks or credit unions. They often have higher interest rates than federal loans and do not provide the same protections, such as income-driven repayment plans or loan forgiveness options. Repayment terms and conditions can vary significantly depending on the lender. Private loans may require a co-signer, especially for undergraduate students without a strong credit history.

Sallie Mae Student Loans: Sallie Mae is one of the largest private student loan lenders in the U.S. It offers loans for undergraduate and graduate students, as well as parent loans. Sallie Mae loans typically require a credit check and may offer multiple repayment plans, including deferred, fixed, and interest-only options while in school. While Sallie Mae loans can help bridge gaps in funding after federal aid is exhausted, they do not come with the same borrower protections as federal loans, such as income-driven repayment or federal loan forgiveness. Borrowers should carefully review interest rates, fees, and repayment terms before committing.