Which type of loan requires repayment with interest after college?

Private loans are a form of financial aid that must be repaid with interest after the borrower completes their education. Unlike grants and scholarships, which are essentially gift funds that do not require repayment, private loans are loans provided by financial institutions that require the student to take on debt. These loans are typically used to cover tuition and related expenses that exceed what federal financial aid provides.

Repayment of private loans usually begins after graduation, which means that the borrower is responsible for making monthly payments including interest. The terms of these loans can vary widely, including interest rates and repayment schedules, depending on the lender and the borrower's credit history.

Grants and scholarships provide funding that does not need to be repaid, while work-study programs offer students part-time jobs to help cover educational expenses without incurring debt. Understanding the nature of these financial aid options is crucial for making informed decisions about funding education.