In a perfect world, all parents would have saved up enough money to pay for the balance not covered by their child’s scholarships or grants. Unfortunately, most of us need to take on some sort of debt to cover some (or all) of the high costs of higher education.

Student loans are a very common way for students to supplement the costs of education. Over 85% of college students have some sort of debt, with the average total amount around $25,000. However, this average doesn’t tell the whole story; of college graduates who have debt, amounts of $50,000 or more are by no means uncommon, and one in ten students will be seeing six-figure debt totals by the time they finish graduate or professional degree programs.

In the United States, the single most common category of student loans are those from the Federal government. Private loans are certainly available, with many lenders who participate in both wholly private and subsidized government loans. As you will see in coming pages, every type of loan has advantages and disadvantages, and a prospective student will be very likely to use multiple sources to cover all of the necessary costs of education.

Like all things related to college, the earlier one starts looking into financial aid, the better off you are. Student loan terms change from year to year (many change significantly every time the commonly-used interest rate benchmarks fluctuate!), so planning too far ahead may lead to some confusion about the exact details; however, the prospective student who begins looking into college costs less than a year before they plan to attend a college or university will find that there are many things that benefit from a thorough examination or comparison.

Student loans come with various interest rates, terms, conditions, and qualifications; comparing different loan options is complicated by the fact that no two apply to the same exact situation. Even among Federal loans, there are loans that depend upon need and those that don’t, loans to student and loans to parents, loans that are subsidized and…but all of that is another topic for another page.