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Student loan A loan is a debt, which entails the repartition of financial assets over time, between the lender and the borrower. The borrower receives an amount of money from the lender, which should be paid back to the lender. The cost of the service depends on interest on the debt. What is a Student Loan Student loan is designed to help with your payments towards the costs of a higher education course. It is normally issued by a service managed by the Student Loan Company called Student Finance Direct, in partnership with the Department for Education and Skills and local authorities.