DEFINITION of 'Education Loan'

Money borrowed to finance education or school related expenses. Payments are often deferred while in school and for a six-month grace period after graduation. There are a variety of federal and private student loans available (see An Introduction to Student Loans and the FAFSA and College Loans: Private vs. Federal).

BREAKING DOWN 'Education Loan'

Your decision about which type of loan to get will affect not just its current interest rate, but your ability to consolidate your loan or have it forgiven down the road. It's generally best to start by trying to get a federal loan before exploring other options. For more, see 10 Tips for Managing Your Student Loan Debt.

RELATED TERMS
  1. Stafford Loan

    A type of federal, fixed-rate student loan that was available ...
  2. Perkins Loan

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  3. Deferment Period

    1. A time during which a borrower does not have to pay interest ...
  4. Student Debt

    Money owed on a loan taken out to pay for educational expenses. ...
  5. Student Loan Interest Deduction

    Student Loan Interest Deduction is a tax deduction for interest ...
  6. Loan

    The act of giving money, property or other material goods to ...
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RELATED FAQS
  1. Why are private student loans generally more expensive than federal loans?

    Make the right decision between a federal student loan and a private student loan when looking for financial aid for your ... Read Answer >>
  2. Federal student loan rates: who sets them, why they vary

    Federal student loan rates are set by Congress, not by banks. Learn more about who gets what rate, and how often they get ... Read Answer >>
  3. What's the difference between a grace period and a deferment?

    Learn the difference between grace periods and deferments and when each type of delayed-payment period applies to various ... Read Answer >>
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