1. By: Sydney Smith

2.   Click on the link below and please will out the test to the best of your ability Pre-Test

3.   A student loan is designed to help students pay for university tuition, books, and living expense.  It may differ from other types of loans in that the interest rate may be substantially lower and the repayment schedule may be deferred while the student is still in education.  It also differs in many countries in the strict laws regulating renegotiating and bankruptcy What is a student loan?

4.   The Problem: There is almost one trillion dollars in outstanding student loans in the US today; this is even more than credit card debt.  The average student graduates with 26,000 dollars in student loans. This is in part a problem with tuition increasing at a steeper rate than inflation The Problem

5.   Many people also attribute the problem to how simple it is to get a student loan.  Many people get student loans without giving much thought to the ramifications  Additionally, due to the passage of the Bankruptcy Reform Bill of 2005, even federal student loans are not discharged during bankruptcy. The Problem

6.   In the United States, there are two types of student loans: federal loans sponsored by the federal government and private student loans, which broadly includes state-affiliated nonprofits and institutional loans provided by schools.  Student loans may be offered as part of a total financial aid package that may also include grants, scholarships, and/or work study opportunities. Types of Student Loans

7.   The overwhelming majority of student loans are Federal loans. Federal loans can be "subsidized" or "unsubsidized".  With subsidized loans interest does not start to accrue until the student graduates, with unsubsidized interest begins to accrue immediately.  With both the payments don’t begin until 6 months after the student finishes schooling Subsided vs. Unsubsidized

8.   An Income-Based Repayment plan is an alternative to paying back student loans, which allow the borrower to pay back the loan based on the person’s income  However, income based repayment does not apply to private loans. IBR plans generally cap loan payments at 10% percent of the student borrower's income. Interest accrues and the balance continues to build.  However, after a certain number of years, the balance of the loan is forgiven. This period is 10 years if the student borrower works in the public sector and 25 years if the student works at a for-profit. Income-Based Repayment

9.   Start with the safest loans. Federal loans are the safest place to start.  Interest rates on federal loans don’t change over time and aren’t affected by your credit rating  Federal loans also come with some guaranteed borrower protections in case you’re unemployed or have other financial problems after college. Tip for Student Loans

10.   Unsubsidized Stafford Loans are the next best option, and they’re available to everyone, regardless of income.  Interest builds up while you’re in school, but you don’t have to start making payments until six months after you graduate, and you still get the federal borrower protections.  The interest rate for Unsubsidized Staffords is fixed at no more than 6.8% Tips for Student Loans

11.   Private student loans, sometimes called “alternative” loans, are much riskier  They’re a lot like credit cards: even if they start at what seem like low rates, those rates can shoot up at any time, and the interest costs can quickly surpass whatever you borrowed to begin with.  Also, they don’t have the borrower protections that come with federal loans. Tips for Student Loans

12.   Shop around. If your school recommends borrowing from a certain lender or lenders, find out why. Schools can have many reasons for choosing a “preferred lender.”  Depending on what they are, you may be able to get a better deal by shopping around.  Get the full terms of what the preferred lender or lenders have to offer before you make any commitment. Tips for Student Loans

13.   Federal loans are available from lots of different banks and lenders, and many offer discounts on fees or interest rates.  Private loans vary widely in costs, and they can be tricky to compare  Even a seemingly objective resource usually only includes lenders that pay to be listed. If you find a good rate on a private loan, keep talking to other lenders, and see if they will beat that rate.  Make sure you get the final deal in writing, and that you understand the limitations and restrictions Tips for Student Loans

14.  A good rule of thumb is that your total education debt for your entire college education should be less than your expected starting salary after you graduate. Ideally your student loan debt should be less than half your expected starting salary. Rule of Thumb

15.   Please take the test in the link below. You may use your note sheet on the test. Post Test

16.   Discuss the following questions with those sitting around you  Do you think that it is worth it to go to a more expensive college if you have to take out student loans?  Is there any value to going to schools out of state?  Is it worth the extra money to go to a private college? Activity!!!!