There are three types of student loans: two of which are federally subsidized and unsubsidized sponsored by the federal government and the other type is private student loans. The unsubsidized program allows students to borrow money with interest accruing during school and subsidized loans allow them to defer interest accrual until they are no longer in school. Private lenders are also currently guaranteed a return on their investment due to legislatively enacted changes in 2005, prohibiting the discharge of any student loan, unless the debtor is able to demonstrate "undue hardship."
Qualification is based on several factors. their income level, parents' income level, and other financial considerations are used to determine if they are eligible to borrow.
There are a few differences between a student loan and conventional loans - 6% interest rates (higher than most home loans) and inability to negotiate. The interest rate on a student loan will generally be at least two percentage points lower than the going market rate for conventional loans.
Repayment typically begins anywhere from six to twelve months after a student leaves school, or if course load drops to half time or less, make sure to check the exact terms and conditions of any student loan.
Extension options include extended payment periods offered by the original lender and federal loan consolidation. There are also other extension options including income sensitive repayment plans and hardship deferments. Extensions and consolidation will also add to the principle, many times the unpaided interest and penalties becomes capitalized.
Source: Wikipedia