Student Loans

Compare student loans from a range of leading lenders so you find the best deal

Last updated by Zaving Editorial Team, on April 4th, 2024

Higher education can open doors to new opportunities, but it can also be expensive. Student loans play a crucial role in helping students finance their education and achieve their dreams. With an overwhelming number of options available, finding the right student loan can be a daunting task.

Zaving is here to help you navigate the complex world of student loans and make informed decisions using our user-friendly comparison platform. In this comprehensive guide, we'll cover the essentials of student loans, provide detailed answers to common questions, and help you discover the best financing options for your education.

Understanding the basics of student loans

Student loans are designed to help students cover the cost of higher education, including tuition, fees, books, and living expenses. There are two primary types of student loans:

  1. Federal student loans: These are loans provided by the U.S. government, and they typically come with more favorable terms and borrower protections than private loans. There are several types of federal loans, including Direct Subsidized Loans, Direct Unsubsidized Loans, and Direct PLUS Loans.
  2. Private student loans: These loans are provided by private financial institutions, such as banks, credit unions, and online lenders. Private student loans can be used to cover education expenses not covered by federal loans or other forms of financial aid, but they usually have higher interest rates and less flexible repayment options.

Applying for a loan:

Applying for loan requires careful planning and research to ensure you're making the best decision for your financial future. Here's a step-by-step guide to help you through the process:

  1. Complete the Free Application for Federal Student Aid (FAFSA): The FAFSA is a crucial first step in applying for federal student loans, as well as other forms of financial aid, such as grants and work-study programs.
  2. Review your financial aid award letter: Once you've submitted your FAFSA, you'll receive a financial aid award letter from the schools you've been accepted to. This letter outlines the types of financial aid you're eligible for, including federal student loans.
  3. Compare federal and private loan options: If you still need additional funds after exhausting your federal loan options, consider exploring private student loans. Use Zaving's comparison platform to compare interest rates, repayment terms, and other features of private loans from multiple lenders.
  4. Apply for the chosen loan: Once you've determined which loan is best for you, complete the application process as instructed by the lender or the school's financial aid office.

What is the difference between subsidized and unsubsidized federal loans?

Subsidized and unsubsidized federal student loans differ in terms of eligibility, interest accrual, and borrowing limits. Subsidized loans are available to undergraduate students who demonstrate financial need, while unsubsidized loans are available to undergraduate, graduate, and professional students, regardless of financial need. The key difference between the two is that the federal government pays the interest on subsidized loans while the student is in school and during deferment periods, whereas interest on unsubsidized loans begins accruing immediately and is the responsibility of the borrower.

How do I know if I qualify for a federal student loan?

To qualify for federal student loans, you must meet certain eligibility requirements, such as:

  • Being a U.S. citizen or eligible non-citizen
  • Having a valid Social Security number
  • Enrolling in an eligible degree or certificate program at an accredited school
  • Maintaining satisfactory academic progress
  • Registering with the Selective Service System, if required
  • Completing the Free Application for Federal Student Aid (FAFSA)

To determine your eligibility for specific federal loan programs, you'll need to review your financial aid award letter, which is provided by your school after you've completed the FAFSA.

What factors should I consider when choosing a private loan?

When choosing a private student loan, consider factors such as interest rates, repayment terms, fees, and borrower benefits. It's essential to compare multiple loan offers to find the best fit for your needs. Zaving's comparison platform can help you easily compare loan features from different lenders.

What are the repayment options for federal loans?

Federal student loans offer several repayment options, including:

  • Standard Repayment Plan: Fixed monthly payments over a 10-year period
  • Graduated Repayment Plan: Payments start low and increase every two years, with a repayment term of up to 10 years
  • Extended Repayment Plan: Fixed or graduated payments over a period of up to 25 years, available to borrowers with more than $30,000 in Direct Loan debt
  • Income-Driven Repayment Plans: Monthly payments are based on your income and family size, with remaining loan balances forgiven after 20 or 25 years of qualifying payments

It's crucial to carefully review your options and choose the repayment plan that best aligns with your financial situation.

Can I consolidate my student loan?

Yes, you can consolidate your loans through a Direct Consolidation Loan, which combines multiple loans into a single loan with a fixed interest rate based on the weighted average of your original loans' interest rates.

Consolidation can simplify your loan repayment process and may qualify you for additional repayment plans or loan forgiveness programs. However, it's important to consider the potential drawbacks, such as the loss of certain borrower benefits and a potentially longer repayment term.

Are student loans forgiven after a certain period?

In some cases, federal student loans can be forgiven, discharged, or canceled under specific circumstances, such as:

  • Public Service Loan Forgiveness (PSLF): Borrowers who work full-time in qualifying public service jobs and make 120 qualifying monthly payments under an income-driven repayment plan may be eligible for forgiveness of their remaining loan balance.
  • Teacher Loan Forgiveness: Teachers who work in low-income schools or educational service agencies for five consecutive years may qualify for forgiveness of up to $17,500 on their Direct Subsidized and Unsubsidized Loans.
  • Income-Driven Repayment Forgiveness: If you're enrolled in an income-driven repayment plan, your remaining loan balance may be forgiven after 20 or 25 years of qualifying payments, depending on the specific plan.

Keep in mind that loan forgiveness programs typically have strict eligibility requirements, and not all borrowers will qualify.

Got further questions about student loans?

Can international students apply for a student loan?

International students are generally not eligible for federal student loans, but they may qualify for private student loans with a creditworthy U.S. co-signer.

Can I use my loan for living expenses?

Yes, student loans can be used to cover living expenses, such as housing, food, and transportation, in addition to tuition and other education-related costs.

Does a student loan affect my credit score?

Yes, student loans can affect your credit score. Making on-time payments can help build a positive credit history, while late or missed payments can negatively impact your score.

Can student loans be discharged in bankruptcy?

Discharging student loans in bankruptcy is possible but rare. You must prove that repaying the loans would cause “undue hardship” in a separate legal proceeding.

Are there any student loan forgiveness programs for healthcare professionals?

Yes, there are several student loan forgiveness programs specifically for healthcare professionals, including the Nurse Corps Loan Repayment Program, the National Health Service Corps Loan Repayment Program, and the Indian Health Service Loan Repayment Program. Eligibility requirements and benefits vary by program, so it's important to research each option thoroughly.

Can I refinance my student loan?

Yes, refinancing your student loans involves taking out a new loan with a private lender to pay off your existing loans. This may be an option to consider if you have a strong credit history and can secure a lower interest rate or better repayment terms.

Are student loan interest rates fixed or variable?

Federal student loan interest rates are fixed, meaning they remain the same throughout the life of the loan. Private student loan interest rates can be either fixed or variable, depending on the lender and the specific loan product.

How often do I need to complete the FAFSA?

You need to complete the FAFSA each year you plan to receive financial aid. The FAFSA becomes available on October 1st for the following academic year, and it's recommended to submit it as soon as possible to maximize your eligibility for aid.

What is the grace period for loan repayment?

Federal student loans typically have a grace period of six months after you graduate, leave school, or drop below half-time enrollment before you must begin making loan payments. Grace periods for private student loans vary by lender and loan terms.

Can I defer my loan repayments?

Federal student loans offer deferment options that allow you to temporarily postpone loan payments under certain circumstances, such as economic hardship, unemployment, or military service. Deferment options for private student loans depend on the lender's policies and loan terms.

Is there a penalty for paying off my loan early?

There is no prepayment penalty for paying off federal student loans early. Most private student loans also do not have prepayment penalties, but it's essential to review your loan agreement or consult your lender to confirm.

Can my student loans be transferred to another school?

Federal student loans can be transferred to another eligible school if you change institutions. Private student loans may also be transferable, but you'll need to consult your lender for their specific policies.