The Federal Student Loan - A Good Idea

Although I have never needed to use a federal student loan, I did learn a thing or two about it and other loans when I was thinking about getting one out a year ago.

About a year ago I was considering pursuing further education and, as a result, needed to find the funding. I got interested in loans and talked to the people at the University about how they work. What I learned was really helpful, especially in regards to a federal student loan.

The thing is - the best loans are the federal ones. A federal student loan is subsidized by the government, and as such it is a very low interest rate (about 8% max) and is the best deal out there. Other loans that are from private companies like banks will be a worse choice because, althought they try to bribe you with more money available, their rates can be as high as 25%! This is a huge difference and can mean years, if not decades, out of your life that you will be paying back those loans if you get an average education. And remember, the percentage is APR, it's not a percentage like annual return on a fund - so it is much more than what they are telling you the rate is.