Today, education is one of the primary criterions to build up a promising career of a student. But everyone does not equally enjoy this fair advantage due to the diversity in economic status. There are several students who desperately seek for the financial aid. Such students are usually funded from sources like financial institutions, charitable institutions, scholarships and even loans. The term 'student loan' explicitly means the financial assistance that is provided to a student and it is repayable after a certain period. Whenever grants such as scholarships are offered to students they are like the emolument paid. They are usually provided to those students seeking admissions for higher or professional education, which requires a lump sum investment. Student's loans bear the least percentage of interest compared to the other form of loans.

In the United States the two main categories of student loans are the a) federal loans b) private loans. The federal loans may be directly endorsed to the students or handed to the parents. It is authorized by the government under the Title IV of the Higher education act. The federal loans in the United States are known by the n

ame Stafford loans or Direct loans. When they are directly paid to the students they are repayable after their course of graduation but the amount offered to them is limited. When the parents receive the loan, a higher amount is given but the payment should be made immediately in installments.

Private student loans are paid either to the parents or students. The amount that is paid is higher and the payment is made only after graduation.

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