Depending on who you ask, you’ll find praise and condemnation of the student loan industry. For some, it was an invaluable and necessary means to getting the education they richly desired while others are still stuck underneath a tremendous amount of debt with just a flicker of light at the end of the long, dark tunnel.

As of 2016, the amount of student loan debt in the United States has topped $1.27 trillion with more than 43 million Americans currently borrowing money in the form of financial assistance towards school tuition. The majority of these borrowers are between the ages of 20 and 30 years and they have an average monthly payment of $351.

But while student loan debt is a hot button topic across the country, this form of financial aid is often the only way that a large number of students both young and old can afford to attend the school of their choice. With over 20 million Americans enrolling into colleges and universities annually, more than half of them turn to one of the many student loan programs that are available from both private lenders and government-backed funding.

Although student loans get a bad rap due to the large numbers associated with them, they can be a vital and beneficial component in an individual’s personal growth. Not only do these loans allow you to attend school but they are also a good way to build and maintain a good credit score through repayment. Some types of these loans also offer certain repayment benefits and arrangements that aren’t available from alternate lending sources.

There are two routes to go when you are looking into applying for a student loan. The first is the one that most potential borrowers investigate initially, seeking out government help through federal loans. These work two different ways, either the money comes to you from the Department of Education or the money comes directly from the school you wish to attend by way of the federal-backed Perkins loan program.

The second is through one of the many private lenders throughout the industry like SoFi, Wells Fargo, Citizens Bank, Sallie Mae, and Common Bond, just to name a few, who offer loans to borrowers with varying, competitive annual percentage rates (APR) and various other requirements necessary for approval. Other companies like AmeriTech Financial of California help to consolidate and lower these payments typically after you’ve graduated. Wells Fargo and Sallie Mae loans are typically similar to those you might find with any type of loan from a bank or other financial institution. Credit score is a big factor and those without one or with poor credit may apply with a co-signer who has a much more desirable credit history. But on the plus side, these loans come with certain borrower protections that most other loans do not offer, such as the ability to defer payments while attending school and financial hardship forbearance to name a few.

BIG BUSINESS

Since student loans are still such a sought-after form of lending, principal entities in and around the industry have taken great strides to maintain its health and well being with legislators. The student loan industry spent $3.3 million in lobbying efforts in Washington D.C. and spent nearly $500,000 in campaign contributions to Republican members of Congress in the 2016 election cycle. Donations to Democratic members made up only a fraction of that number at roughly $150,000.

While $3.3 million in lobbying efforts may sound like a whole lot of money, that actually represents a downward decline from previous years. In 2013-2015, the numbers were much higher at amounts with a steady increase in spending at $4.3 million in ’13, $4.6 million in ’14, and $4.7 million in ’15.

Student loan companies make money from giving out loans by way of the interest rates that can rise and fall based on the applicants’ creditworthiness as well as other fees such as origination fees, which are charged to the borrower for originating the loan.

Applying for a private student loan from one of the major companies comes with less risk to the lender than some other loans ever since a bankruptcy reform bill was passed in 2005. Under the new rules, private student loans may not be dismissed by an individual who has filed for bankruptcy. The debt is still outstanding and will remain on your credit report.