Principal and interest
Principal is the amount borrowed. Interest is the cost charged for borrowing and can increase the total amount repaid over time.
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Student Loan Guide
Borrowing can fill a funding gap, but the terms matter. Learn the vocabulary before deciding how much debt fits your education plan.
Federal and private loans differ
Federal student loans and private education loans can have different eligibility rules, interest structures, repayment options, borrower protections, and credit requirements. Compare current terms carefully.
Borrow only what you need
A school may show a maximum amount available, but that does not mean you need to accept all of it. Build a realistic budget and consider the future monthly payment before borrowing.
Understand repayment
Know when payments begin, whether interest accrues while you are in school, how long the repayment term may be, and what options may exist if your financial situation changes.
Turn information into a plan.
Use these concepts to organize your questions, then verify current requirements and terms with the responsible school, program, agency, or provider.
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Go beyond the basics.
Take the next step with a clearer understanding of the moving pieces.
Borrow with the total repayment picture in mind
The amount borrowed is only the starting point. Interest rate, whether interest accrues while you are in school, fees, repayment period, payment options, and borrower protections can affect the long-term cost. Compare terms carefully before accepting or applying for financing.
Federal and private loans can differ
Federal student loans and private education loans may have different eligibility requirements, rates, repayment structures, deferment options, and borrower protections. Private lenders also set their own underwriting standards. Review current terms from the responsible program or lender rather than assuming products work the same way.
Consider how much you actually need
Before borrowing, subtract confirmed grants, scholarships, savings, expected income, and other resources from your realistic education budget. Borrowing only what is needed can reduce future payments and total interest. Avoid treating the maximum available amount as a target.