The student loan can be defined as a loan given to a student in order to help him pay for higher education. In the United States of America, the government is the institution that usually offers this type of loans. The big difference between grants and scholarships and the superior education loans is that the student loan has to be repaid by the student after finishing his studies while grants and scholarships do not have to be paid back. Generally, there are two main forms of student loans: federal loans that are given to a student and private loans that are offered to the student and student's parents.
The loan which is given directly to the student in order to supplement his financial resources represents a federal student loan. Depending on the financial necessities of the student, this kind of loan can be subsidized or unsubsidized. The subsidized federal loan is given to a student who must provide evidence about his financial needs for that loan. By another side, in an unsubsidized student loan, the government will allow the student to return the amount accumulated during the college on the end of his studies and does not pay the interest amount on the loan. But, even if a loan is subsidized or not, United States Department of Education will guarantee the loan directly or through assurance agencies. The grace period of a federal loan is six months and almost all the students fulfill the conditions for obtaining this kind of loan.
The Parent Loan of Undergraduate Student is the specific type of loan that offers the possibility for parents to borrow money in order to cover the educational expenses of higher education. In the situation of this loan, payments start as soon as the loan is disbursed and it has no grace period.
In the case of a private student loan, the student must make the payments after finishing the superior studies. The grace period of a private loan is six months, but there are some particular occasions in which the grace period is extended at twelve months only with the approval of the banks or others financial authorities that provided the initial loan.