A loan is a type of debt. Like all debt instruments, a loan entails the redistribution of financial assets over time, between the lender and the borrower.

Student Loan

Student loans are not grants, as they do have to be paid back, but they can definitely help you focus on your studies and not on worrying about money.

Getting a higher education can be a very expensive option that may leave you in a financial crisis after you graduate. Getting an advanced education is a great idea, starting out in life but doing this with a large debt is not feasible.

The first step to avoid any financial crisis is planning. You should begin planning for how to fund your education well before you get there. This advanced planning can save you thousands of dollars in student loans and even help you graduate earlier.

These days getting a higher education is a requirement for everyone but you should make sure that this does not leave you with a high debt load. With some careful planning when you are in college and by doing a little extra work you will be able to reduce the costs of your higher education. And of course the more you are able to reduce your student loans the sooner you will be free and clear and rapidly moving ahead with your career.

In the past the federal government has had a lending program to assist people with funding their secondary education costs but this system has it draw backs. The old system of student loans was fraught with fraud, was time consuming and very confusing to most people.

Students in the United States do not have to borrow from banks. The Direct Loan Program is one of the many Federal Student Aid (FSA) programs provided by the Department of Education. The federal government raises the loan funds through Treasury bill auctions that it regularly conducts.