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What is a student loan?

I am a recent high school graduate seeking information on student loans. I would like to understand the subject before pursuing a university education. My quest on this was ignited when researching on private loans for college. I came across unfamiliar aspects of student loans.

The first one among them is the student loan number. I welcome any information on this matter. I think it is an important part of these loans.

Second, I humbly ask for advice on federal student loan forgiveness. I do not understand this aspect of the student loan issue.

Help me understand, what is a student loan?

Whitney Matthews

in Student Loans

1 answer

1 answer

Tara Andrews on March 26, 2018

I must admit that your question really speaks to me. Most students who are fresh from high school experience this. It is easy for someone to think that all people know what student loans are. However, this is not always the case. Most of us will learn about this when we get to college or university.

Student loans have come with an array of demands, conditions, criteria etc. Hence, your quest to know about federal students loan forgiveness and the student loan numbers.  I will try to squeeze relevant information on the same in my short answer. Hope it will help you get some more insight and even make a decision.

Long story short, student loans are a type of loan that is meant for students who would like to pursue education past secondary school. This is often college or university education.  The loan is specifically intended to cater for tuition fees and other associated monies such as living costs, book fees, supplies costs etc. An outstanding feature of student loans is that they attract noticeably lower interests when compared to other types of loans. The mode of repayment is also more flexible.

There are two major types of student loans. These are:

  1. Federal loans: The federal government provides these loans. They are meant to get you through your post-secondary education. Do not use your loans on other issues, not even health. Please keep in mind this money is to be paid with interest.
  2. Private loans for colleges: These are loans that are provided by private companies, agencies, banks, institutions and other firms that help you pay for your college. Private student loans often have very high-interest rates. It is therefore advisable that you thoroughly exhaust your federal loans before turning to these loans.

Federal Loan Forgiveness

This refers to the discharge of a person from their obligation of repaying their student loans. This might involve absolute cancellation of the student loan or a part of the principal amount. In some instances, the interest is the only canceled or discharged amount.

A loan cancellation broadly refers to the removal from your obligation to repay all or a portion of your student loan. This is the case when it comes to people who work fulltime in certain occupations. The term loan cancellation is mostly used with the Perkins Loan Program. This is because it offers various cancellation perks.

Jessie Thompson2 years ago

This answer is very informative. After, one read you are able to grasp some of the important issues that come with student loans. However, I have noticed that there is no information on the student loan number bit.  

Allow me to explain it. This is a number that is allocated to you when you apply for some loans. This is sort of an identification number that identifies you as their customer. Some private loan companies give this number to their clients.

When it comes to federal student loans, I do not think that there are any student numbers assigned to you. However, this is basing on my experience.

Away from that, I would like to provide information on loan discharge. This is whereby the borrower is allowed to cancel whole or part of the student loan proceeded to them due to various situations such as school closure, falsification of loan information etc.

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