Portland Community College | Portland, Oregon Portland Community College

What is a student loan?

Student loans are money that you borrow and agree to pay back, for the purpose of paying for your school costs and living expenses while you are in college.

Are loans bad?

Loans are not a bad thing as long as you use them wisely. Many students decide not to go to college because they don’t want to be in debt, but having a college degree will likely earn you more money. So used wisely, loans can help get you to a better place in your career.

Do I really have to pay them back?

Yes. But if they are federal student loans you can find payment plans that will help reduce your monthly payments, but spread out your payments for more years.

I get advertisements for loans in the mail, are these the same?

There are two basic categories of student loans: federal and private.


Federal student loans

Federal student loans are given to students through the FAFSA application. These are loans from the federal government and have some perks like flexible repayment plans and the ability to pause your payments while you’re in school.

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Private student loans

There are banks and other companies that provide loans outside of the Federal loan system. However, make sure to read the fine print. Often times these loans have higher interest rates, less flexible payment plans, and steeper penalties for not paying them on time.