How do student loans work in the USA?

Question

I am just curious how exactly do students manage to pay as much as $45,000 per year in tuition at private colleges if they do not have grants or scholarships. Are their parents super rich or the students get government loans to cover their tuition, room and board and other expenses? And how these government loans work and are they enough to cover almost $60,000 of college expenses per year?

For example, students here in the UK get a full student loan of £9,000 per year and about £5,000 for their room and board depending on how much their family earns. And you don't have to start repaying back your loan until you are earning well above £21,000 and even after that you just pay 9% of the amount you earn above £21,000 and the loan is written off after 30 years.

How does that work in the USA? When do the students pay off their loans if they get one from the government?

Answer 1

Student loans are a way to pay for higher education. Whether you love debt or you hate it, student loans are an investment in your future. They can make an education possible when there is no other way. This page covers the basics of student loans and points you towards additional resources.



Student loans are unique because they have some special features. You often get an attractive interest rate, and almost any student can borrow some money – regardless of income or credit history. Student loans offered through government programs tend to be the most attractive.

Answer 2

Federal student loans are capped at a maximum of $5500 for a dependent student's freshman year. That amount goes up a little bit each year but it is rarely enough to fully cover the cost of tuition at an in state public school. You don't get more for room and board. It is NEVER enough to cover the costs of a private school. Students who attend private schools are either rich enough to pay the costs or smart enough to get large scholarships. Loans must be repaid starting 6 months after graduation, whether you have a job or not. Private loans are an option for students who have cosigners with good enough credit.

Answer 3

I doubt this could relatively artwork. i'm no longer a criminal expert with wisdom in international or financial ruin regulation, however, this in all possibility won't artwork. in the beginning, you may't discharge pupil loans in a financial ruin contained in america. whether you're eligible for government tips, that is seized to pay the debt. Are you a Canadian citizen? while you're, then you could circumvent paying the debt via moving decrease back to Canada. in any different case, this shall no longer artwork. regrettably, the pupil loans rules have been written against the debtors. The creditors have each and all of the means and benefit.

Answer 4

They go to school for years and end up with a mountain of debt which they have to stay enslaved to a job they hate to pay off. Then they take out a mortgage and spend the rest of there life paying for a house and career instead of traveling the world... Sad reality of Student loans!

Answer 5

Yeah, the US doesn't work as well as Canada and the UK.



People go into debt, borrow against things, max credit cards to attend college. Then they don't study and do well, never qualify for merit scholarships, and owe tons of money. It is a mistake to ever borrow for schooling in the US!

Answer 6

So amazed that I found this topic already answered! Its like you've read my thoughts!