Financial Aid 101 - Loans

Loans are a contract to borrow money and repay it over time, with interest. In the case of most federal student loans, you do not need to begin repaying them until several months after you leave college or are no longer enrolled at least half-time.

Every year, more than $70 billion in federal student aid is given out in the form of low-interest loans.

Some banks and financial institutions offer private student loans. These loans often have variable interest rates, require a credit check and may not provide the benefits of federal student loans.

If taking out loans makes you feel a little nervous, you are in good company. Many of the students interviewed for this Web site felt the same way. But looking at loans as an investment in their future helped them get past their fear.

To learn more about federal student loans, read Federal Aid First, an online brochure from the U.S. Department of Education.