Heading to college is exciting, but paying for it? That can be overwhelming. If you’re considering student loans to help fund your education, it’s important to understand how they work and what you’re signing up for.

Here’s a quick guide to student loans, interest rates, and repayment terms – plus how Student Loan Insurance can protect you after graduation.

1. The Basics of Student Loans

Student loans are borrowed money that help cover the cost of college, including tuition, housing, and other expenses. The key thing to remember? Loans must be repaid, usually with interest.

There are three main types of loans:

• Federal Loans: These are issued by the government and are often the best first choice because they typically have lower interest rates and more flexible repayment options.
  • Subsidized Loans: The government pays the interest while you’re in school.
  • Unsubsidized Loans: Interest starts building up as soon as the loan is disbursed.
• Parent PLUS Loans: These are also issued by the federal government. Unlike other federal loans, parent PLUS loans are taken out by parents to help pay for their child’s education. They are credit-based and the parent, not the student, is responsible for repayment.
• Private Loans: These come from banks or private lenders. They can help if you need more money than federal loans provide, but they often have higher interest rates and fewer protections.

2. Understanding Interest Rates and Repayment Terms

• Interest Rates: This is the cost of borrowing money, expressed as a percentage. Federal loans typically have lower fixed interest rates, while private loans may have variable rates that can increase over time.
• Repayment Terms: Most student loans don’t require you to start repaying while you’re in school. Typically, repayment does not begin until 6 months after you graduate or leave school. This 6-month window is called a grace period. Additionally, federal loans often allow income-driven repayment plans, while private loans may have stricter terms.

3. What Happens After Graduation?

The reality is, repaying student loans can be challenging, especially if your first job doesn’t pay as much as you’d hoped. That’s where Student Loan Insurance can make a big difference.

How Student Loan Insurance Works:

• If your income is less than $50,000* after graduation, Student Loan Insurance helps repay your federal, private, and parent PLUS loans.
• The less you earn, the more help you receive, giving you financial breathing room while you build your career.

*Income amount may vary. Check your price for details.

Why It’s Smart:
Student Loan Insurance protects you from financial stress, letting you focus on pursuing your passions without worrying about loan repayment. Whether you plan to work your way up the corporate ladder or follow a passion for social services, Student Loan Insurance ensures you’re covered.

4. How to Borrow Wisely

Before taking out loans, follow these steps to make smart borrowing decisions:

• Understand Your Total Costs: Factor in tuition, housing, and personal expenses for all four years, not just the first.
• Borrow Only What You Need: It might be tempting to borrow more for extra cash, but remember you’ll have to pay it back, with interest.
• Explore Scholarships and Grants: Max out all “free money” options before turning to loans.

Your Future is Worth Protecting

Taking out student loans is a big step, but with the right knowledge and protections, you can manage them confidently. By understanding your options and considering tools like Student Loan Insurance, you’re setting yourself up for success, during college and beyond.

Want to learn more about Student Loan Insurance? Discover how it works.

Your education is a great investment. With the right plan, you can make sure it pays off.