Many students find that they must help finance their college education with an education loan. This is a form of financial aid that must be repaid, with interest. (Scholarships, on the other hand, do not have to be repaid.) As a minority you have a good chance of getting a scholarship, but even so, few students can afford to pay for college without some form of education financing. There are government and private loans. The Federal education loan programs offer lower interest rates and more flexible repayment plans than most consumer loans, making them an attractive way to finance your education.

Federal law sets the maximum interest rates and fees that lenders may charge for federally-guaranteed loans. Many lenders offer a variety of student loan discounts to attract borrowers. Loans can usually be paid back gradually over long periods of time, after you leave school.

Everyone's situation is different depending on tuition costs, financial aid packages, scholarships, grants, work-study programs and  family income, but just to get a rough idea, about two-thirds (65.6%) of 4-year undergraduate students graduated with a Bachelor's degree and some debt in 2007-08, and the average student loan debt among graduating seniors was $23,186 (excluding PLUS Loans but including Stafford, Perkins, state, college and private loans).

Education loans come in three major categories: student loans (e.g., Stafford and Perkins loans), parent loans (e.g., PLUS loans) and private student loans (also called alternative student loans). A fourth type of education loan, the consolidation loan, allows the borrower to lump all of their loans into one loan for simplified payment. A recent innovation is peer-to-peer education loans. Federal education loans are available in either the Direct Loan or federally-guaranteed student loan programs.

Federal student loans have low interest rates and do not require credit checks or collateral. Student loans also provide a variety of deferment options and extended repayment terms. These loans include the Federal Stafford and Federal Perkins Loans.