Student Loans

Most student loan borrowers opt to take out federal student loans, which have fixed interest rates and don't have to be repaid until a few months after graduation. The two main types of federal student loans are subsidized loans and unsubsidized loans. The subsidized version is meant for students with the highest financial need, as the government makes interest payments on the loan while the student is still in school.
Federal unsubsidized loans are available for the average student borrower regardless of financial situation. Undergraduate students who are still dependent on their parents are allowed to borrow up to $31,000 total over the course of their career, with a limit of $23,000 in unsubsidized loans. Federal loans have the same interest rate for all borrowers.

Due to the caps on federal loans, some students choose to take out loans with private companies. Private loans often offer interest rates that are slightly lower than for federal loans, though rates are dependent on each individual's financial situation. Student loans from private lenders can also be borrowed with a variable interest rate, meaning that interest payment goes up or down depending on the current interest rate of the market. Limits on private loans vary from lender to lender.

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