Understanding, What Is Student Loan ??

 Some of us may be familiar with the term student loan. Referring to Wikipedia, the student loan itself is basically a type of loan designed to help students pay for post-secondary education and related costs, such as tuition, books and supplies, and living expenses.

Understanding, What Is Student Loan ??

Although both are loans, this program is different from other types of loans in reality. Say CREDIT WITHOUT COLLATERAL or HOUSING LOANS. Where not only the interest rate may be much lower, but the payment schedule can also be deferred while the student is still in school. So it is only paid when the borrower is already working, and it is adjusted to the salary received.

Student loans are found in several countries, and have different schemes depending on applicable laws.

In New Zealand, for example, these loans are given to tertiary students who meet the funding criteria. Full-time students can claim loans for tuition and living expenses, while part-time students can only claim training fees.

The borrower himself must be a resident of New Zealand, which will not be subject to interest and the loan can be repaid when the borrower starts working and has an income above the minimum threshold.

In Korea, student loans are given to students who have financial difficulties studying. This refers to the government's philosophy that Korea's future depends on developing talent and that no student should stop studying for financial reasons.

Meanwhile, the United States divides student loans into two, namely those sponsored by the federal government and private.

Most student loans are federal loans. These loans can be “subsidized” or “unsubsidized.” Interest does not accrue on subsidized loans while the student is in school. Student loans may be offered as part of a total financial aid package which may also include grants, scholarships and/or work-study opportunities.

Origin of Student Loan

The term student loan itself first appeared in 1840, when educational credit was offered at Harvard University, United States (US), citing cnbcindonesia.com.

However, this loan program was only officially offered to students in the US in 1958, under the National Defense Education Act. These loans were provided to help the US compete with countries such as the Soviet Union.

At that time, the loans were only for high school students who excel in mathematics, science, engineering, and foreign languages or those who wanted to become teachers.

Currently, apart from the United States, South Korea and New Zealand, many other countries implement student loan schemes, including Australia, India, England, and even Indonesia.