A student loan is money borrowed to pay for education. It covers tuition, fees, books, and sometimes living expenses. The borrower agrees to repay the loan with interest after leaving school or dropping below part-time status. Default carries serious consequences.

Loans come from two main sources. Governments offer loans with subsidized rates and income-based repayment. Private lenders offer loans with market rates and fewer protections. Government loans are usually the better deal, but they have limits. Students often need both.

Debt levels have risen sharply in many countries. In the United States, total student debt exceeds $1.7 trillion. Graduates delay buying homes, starting families, and saving for retirement. Some never finish their degrees but still owe the money. The system is under pressure from all sides.

Key features

• Subsidized vs. unsubsidized
• Interest rates
• Repayment plans
• Deferment and forbearance
• Loan forgiveness programs