I have noticed some questions popping up on the forums recently about whether a loan is a student loan or not. Generally, if you are asking the question it is a student loan.
Having made that remark let me note that there is a difference between a student loan and a loan to a student. Just because you were a student when the loan was granted or just because you spent the money on school related stuff doesn't make the loan a student loan. For example, if you take a 6K cash advance from your credit card and used it to pay tuition you haven't converted that cash advance into a student loan.
Fundamentally the law looks to the reason why you were granted the loan as the decisive factor in determining whether a loan is a student loan or not. If the loan was granted for an educational purpose it is a student loan. Clearly any government program that granted you a loan via a FASFA meets this test.
The issue of whether a loan is a student loan frequently comes up when dealing with a loan from a private lender. So the question to ask yourself is, "Did the lender loan me this money with an understanding that it would be used for an educational purpose?" If the paperwork indicates they did, it's a student loan.
I want to be clear on this point. The fact you were a student when you took out the loan is not relevant. The fact you spent the money for an educational purpose is irrelevant. The reverse is also true. If you took a student loan and spent it gambling in Las Vegas, you haven't converted that loan into a non-student loan.
It's simply a question of what the purpose of the loan was. If the loan was granted for an educational purpose, it's a student loan.
Having made that remark let me note that there is a difference between a student loan and a loan to a student. Just because you were a student when the loan was granted or just because you spent the money on school related stuff doesn't make the loan a student loan. For example, if you take a 6K cash advance from your credit card and used it to pay tuition you haven't converted that cash advance into a student loan.
Fundamentally the law looks to the reason why you were granted the loan as the decisive factor in determining whether a loan is a student loan or not. If the loan was granted for an educational purpose it is a student loan. Clearly any government program that granted you a loan via a FASFA meets this test.
The issue of whether a loan is a student loan frequently comes up when dealing with a loan from a private lender. So the question to ask yourself is, "Did the lender loan me this money with an understanding that it would be used for an educational purpose?" If the paperwork indicates they did, it's a student loan.
I want to be clear on this point. The fact you were a student when you took out the loan is not relevant. The fact you spent the money for an educational purpose is irrelevant. The reverse is also true. If you took a student loan and spent it gambling in Las Vegas, you haven't converted that loan into a non-student loan.
It's simply a question of what the purpose of the loan was. If the loan was granted for an educational purpose, it's a student loan.