Many students obtain STUDENT LOANS. These loans may be issued by individuals, businesses (as part of an employee’s benefit program), or by the government. A common type of student loan is a Stafford loan, which is guaranteed by the federal government. Typical conditions for a Stafford loan are that the repayment period of the loan is at most 10 years, the minimum monthly payment is $50, and there is no prepayment penalty (this last condition is important because many real estate loans, for example, charge a very high penalty for paying off the loan early). These loans are currently at a fixed rate, and there is a late fee for late payments. An important feature of these loans is that the student does not begin to repay the loan until 6 months after completing the academic program or leaving school.
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