My brother is 18 years old now and is going to University of Riverside and wants to get a student loan but we are not sure how these loans work. I was suggesting that he should get a loan out and invest it in something providing 6% interest rate. Then after he finishes college he can pay back the student loan and keep the interest he accumulated over time.
Is this a good idea?
Can someone explain to me how these student loans work? any hidden fees, extra charges etc.
Do you pay back the loan after you graduate or monthly?
2006-11-26 13:27:35 · 2 answers · asked by mookie123 1 in Business & Finance ➔ Other - Business & Finance
The way student loans work (or at least federal ones) is that you have to apply for them, through the Financial Aid office at your school. After you apply, you will find out what kind of Aid you are eligible for - subsidized loans, unsubsidized loans, grants and workstudy. Grants and workstudy do not have to be paid back. After you graduate, unless you defer repayment, you are given a 6 month grace period before you must start to repay your loans. There are 3 different categories for repayment, they each are a different monthly payment. It all depends on what you can afford. The longer you drag out repayment, the more you end up paying because of interest.
2006-11-26 13:49:10 · answer #1 · answered by Lizzy 3 · 1⤊ 0⤋
Getting a student load is easy. But getting out of debt the student loan creates is the problem. The school does not tell you the whole truth. Just want you to be aware that having a student loan is a life time of debt. Getting an education today is like a rock and a hard place. Damn if you do, damn if you don't. If you do take a loan be careful not to Sallie Mae or any lender associated with them. They will harass you by phone 8-15 times a day for as long as you owe them.
2006-11-27 06:59:56 · answer #2 · answered by DW 1 · 0⤊ 0⤋