There are many different kinds of education loans. Before taking out any loan, be sure to ask the following kinds of questions:

• What are the exact provisions of the loan?
• What is the interest rate?
• Exactly how much has to be paid in interest?
• What will the monthly payments be?
• When will the monthly payments begin?
• How long will the monthly payments last?
• What happens if you miss one of the monthly payments?
• Is there a grace period for paying back the loan?

In all cases, a loan taken to pay for a college education must be repaid, whether or not a student finishes school or gets a job after graduation. Failure to repay a student loan can ruin a student or parent's credit rating. This is an important reason to consider a college's graduation and job placement rates when you help your child choose a school.

Work-Study Programs

Many students work during the summer or part time during the school year to help pay for college. Although many obtain jobs on their own, many colleges also offer work-study programs to their students. A work-study job is often part of a student's financial aid package. The jobs are usually on campus and the money earned is used to pay for tuition or other college charges.

The types of financial aid discussed above can be merit-based, need-based, or a combination of merit-based and need-based.

Merit-based Financial Aid