Student Loans: Financial Analysis and Loan Repayment Strategies

This report provides a comprehensive overview of student loans, differentiating between federal and private loans. It details the characteristics of each loan type, including Stafford, Perkins, and Parent Plus loans for federal loans, and various private loan options such as those offered by Credible, Sallie Mae, College Ave, and Citizens Bank. The report discusses the significance of interest rates, forbearance, and deferment in repayment plans. Furthermore, it highlights the rising student loan debt in the U.S., presenting statistics on the total debt, the number of borrowers, default rates, and average monthly payments. The document also includes references to relevant research, offering a detailed analysis of student loan dynamics and their financial implications for borrowers.

Student loans
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LOANS
Student loans are borrowed amount provide for education purpose where repayment include
interest. Often loans are of two type’s federal and private loans. Government funded loans are
federal loans and they contain Stafford, Perkins and federal plus loans as their major types.
Stafford and Perkins loans are given to students at low interest rates, no requirement of credit
check and collateral need over there. Consolidation of both for repayment plays an important
role upon graduation. Plus loans are considered as parent loan for undergraduate.
Private loans has its various types
1) Credible has unique place in private loan.
2)Sallie mae offer loans available to both students and parents, most flexible option where a
cosigner release and tend to take loan on its own.
3) When it comes to repayment College Ave is best.
4) Citizen Bank is best from a point of view of major bank.
5) Grades evaluation to discover student loans also used.
6) Options offer to choose way of repayment Common bond helps
7) Ascent student loans provide undergrads with no cosigner.
8) Community lenders Lend Key provide loans through credit unions and banks (Gross, J. P., et
al 2019).
Interest rate vary in private loans and fixed for federal one. Forbearance is way for repayment
beyond given time constraint for shorter period only (Delisle, J. D. (2018). After such span of
time one can make payment with accrued interest. Deferment is also help to reduce the payment,
it differs in this case favored the person not to pay accrue interest. However, repayment is unique
with these loans repaid in regular interval.
Year 2019 going to witness more significant carry load of debt. In the year 2018, private and
federal loans took out by numerous college students (69%) with average debt of $29,800
whereas 14% of their parents took out an average of $35,600 in federal Parent Plus loans. US
citizens tend to increase in trillions in student loan debt, 45 million borrowers among themselves.
The total debt cross when compared to credit card debt over $521 billion in case of student loan.
According to recent reports there is: 1) U.S student loan debt of $1.56 trillion in total.
2) Number of American student loan debt bearers are 44.7 million.
3) Percentage wise 11.5% of students loans comes in a category of default.

4) Excluding deferment cases average monthly student loan payment is around $393
5) Excluding deferment case median monthly student loan payment is around $222
References:
Gross, J. P., Cekic, O., Hossler, D., & Hillman, N. (2009). What Matters in Student Loan
Default: A Review of the Research Literature. Journal of Student Financial Aid, 39(1), 19-29.
Delisle, J. D. (2018). Graduate Schools with the Lowest Rates of Student Loan
Repayment. American Enterprise Institute.