How Student Loans Work

You've got a bright future ahead of you. You just have to figure out how to finance it. See more college pictures.

So you got accepted to college. Congratulations! Now that you've run around the house and e-mailed everyone you can think of to tell the good news, it may be time to think about how you'll pay for your higher education.

Financial aid experts recommend that you spend a lot of time cobbling together as many grants and scholarships as possible to pay for school. It's a rare student who gets a free college education, however. When you've exhausted every avenue toward free money, it's time to look at student loans.

Student loans come in a variety of types. Some are based on financial need, while others are much like any other loan and are based on your credit score. They all have one thing in common, though: They must be repaid eventually and normally reach into the tens of thousands of dollars. Knowing what student loans fits your situation best and just how much you'll need, can help save you money in the long run, both in interest and principal.

In this article, we'll look at student loans and what makes them different. Up first are federal student loans.