Guaranteed Student Loan Law and Legal Definition

A student loan is different from other types of loans. In a student loan, the interest rate is low and the principal amounts need not be paid while studying. The interest rate on a student loan will generally be at least two percentage points lower than the interest rate on other loans. A Guaranteed Student Loan is a modified type of student loan. A guaranteed loan is a loan that is insured against default. A Guaranteed Student Loan is guaranteed by a federal or state government. Usually the loan is given to assist the payment of tuition and other educational expenses. The government entity is responsible for paying the interest on the loan. In case of default of a Guaranteed Student Loan, the government is liable.