Student loans can sometimes be an ambiguous area for many students and/or parents to understand. College loans are a great option for students, especially if the students and/or parents are highly aware of what they're getting into. It's important for both parents and students to fully understand the process of student loans. Here are some brief explanations concerning student loans.

Federal Student Loans: Federal student loans are essentially authorized under Title IV of the Higher Education Act.

There are two kinds of student loans: There are federal student loans that exist for students and there are federal student loans that are geared towards parents.

Federal Student Loans to Students: These loans are made directly towards students. Also, there is a grace period before payments must be made. Payments typically must be made after graduation. The federal student loans for students are the Federal Perkins Loan, Stafford Loan, Federal Family Education Loans, Ford Direct Student Loans, and the option for Federal Student Loan Consolidation.

Federal Student Loans to Parents: PLUS loans are loans to parents. Parents can borrow more in comparison to students which can essentially cover any areas that are needed for the student's living situation and education. However, the difference between student directed loans and PLUS loans are that there is no grace period and payments start immediately for parents.

Student Loan Consolidation: Basically, consolidation loans allows students to consolidate federal loans, such as Stafford Loans, PLUS loans, and Federal Perkins Loans into one debt. The advantage for the person repaying the loan is that there are reduced monthly repayments and  a longer term for the loan. Unlike other repayment for loans, consolidation allows a fixed interest rate for the entire life of the loan.

Private student loans: Private student loans are used to either supplement or fully replace federally guaranteed loans. Examples of federal guaranteed loans include the following: Stafford loan, Perkins loans, and PLUS loans.

These are essentially unsecured loans with various options provided on how to repay the loan. Many offer options, such as forbearance and deferral. There are a number of financial institutions that also offer private student loans, such as Citibank, Chase, Bank of America, and Wachovia bank. There are also specialized companies, such as Sallie Mae, Astrive Student Loans, Think Student Loans, and MyRichUncle.

Not sure which private student loan to choose from? Check you financial aid office at your university for a preferred list of vendors. However, in the end it's up to the borrower to find the private student loan plan that best accommodates their own individual needs.