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Education Loan

An education loan is a sum of money borrowed to finance post-secondary education or higher education-related expenses. Education loans are intended to cover the cost of tuition, books and supplies, and living expenses while the borrower is in the process of pursuing a degree. Payments are often deferred while students are in college and, depending on the lender, sometimes they are deferred for an additional six-month period after earning a degree. This period is sometimes referred to as a "grace period."

Key TakeAWay

  • An education loan is a sum of money borrowed to finance post-secondary education or higher education-related expenses.
  • Education loans are intended to cover the cost of tuition, books and supplies, and living expenses while the borrower is in the process of pursuing a degree.
  • Payments are often deferred while students are in college and, depending on the lender, sometimes they are deferred for an additional six-month period after earning a degree.
  • Although there are a variety of education loans, they can be broken down generally into two basic types: federal loans sponsored by the federal government and private loans.

Types of Education Loans

Although there are a variety of education loans, they can be broken down generally into two basic types: federal loans sponsored by the federal government and private loans.