Student loans, unlike grants and student employment, are borrowed money that must be repaid, with interest. When you apply for financial aid, your aid package will likely include student loans. It’s important to understand what types of loans you are offered. Generally, there are two types of student loans:
- Federal student loans - These loans are funded by the federal government.
- Private student loans - These loans are non-federal loans, made by a lender such as a bank or credit union.
Borrowing loans is a huge responsibility. It is important you understand the responsibilities and obligations as a student loan borrower. The more informed you are now, the more prepared you will be in the future and knowing what you owe as a student loan borrower is an important step.
Federal Student Aid (FSA) is the U.S. Department of Education’s centralized database of all federal student and parent loans. All information pertaining to federal student and parent loans will be submitted to Federal Student Aid. FSA provides an overview of all federal student and parent loans, loan amounts, enrollment status, loan servicer, outstanding balances, loan status and disbursements pertaining to a borrower. This information will also be accessible by guaranty agencies, lenders, and schools determined to be authorized users of the data system.