As you may know, student loans are today’s largest form of student aid. Researches have found out that it made up to 54 percent of the total aid awarded every year. However, with the rise of student loans in college, several cases of student loan defaults occur. The student loan debt is even today’s one of the major problems of most student borrowers. It is rising every year and the college expenses as well as the graduate school costs have definitely gone up faster than inflation. Well, let me tell you that this case often surface when you take a particular loan then another student loan followed by another loan. It is often said that as much as you take student loan offers, your loan debt gets bigger and bigger.
Since the case for student loan debt always happens and it carries certain burdens to the attainment of the student’s dream of higher education, it is then important that you consider some steps that will help you lower or manage your debts. Perhaps one of the most necessary things to consider is to borrow loans responsibly.
Many people find it easy to rush through the student loan process. However, if you take a minute considering some of the money saving tips mentioned below, you could save yourself some bucks in the long run.
Most of the time, you may find it tempting to borrow up to the maximum amount. Well, this is what many people call as the “loan trap.” It is the case where you borrow the maximum amount of money from the student loan lending company or institution even if it is more than you can afford to repay. It often occurs for the fact that need-based loans are very easy to apply for and they don’t usually require payments while you are attending your degree. So, to avoid certain consequences as you enter the repayment period, you should avoid the loan trap.
Before you consider borrowing a student loan for your college, think first how much loan you really need. Student loans are one of the things you need for college. Always note that when taking out student loan, you don’t have to borrow the entire amount which is usually specified in your award letter. Just borrow what is enough.
Federal Student Aid Office of the U.S. Department of Education: https://studentaid.ed.gov/sa/prepare-for-college
There are several options available for student loan borrowers. But, before opting for one, it is necessary that you question yourself if you can hold down the expenses; if you can work more, either in the academic year or during vacations; or if there are scholarships available for you. It is often said that if you minimize spending or bring in more money, the amount you have to borrow for things you need for college tends to go down.
Note that the lower the interest rate, the less pricey the student loan is. This actually means, the less you will have to repay for your student loan debt.
For your own sake, here is what the order should be (from the least expensive):
1. Federal Perkins Loans
2. Federal Subsidized Stafford or Direct Loans
3. Federal Unsubsidized Stafford or Direct Loans
4. Alternative or Private Loans
As you may know, most of the students thinking for student loans have access to a special loan source these days. These sources, like the Air Force Aid Society, have student loans terms that are comparable to the Perkins or Subsidized Stafford or Direct Loans. Of course, it may be worth your time to look into the possibilities. There are some sources these days that offer low-interest student loan programs, and perhaps one of the most resourceful is the College Board’s online Scholarship Search.
Types of Aid: https://studentaid.ed.gov/sa/types
As mentioned, there are two available forms of education loans for parents. These programs are what commonly offered by some colleges anywhere in the world. But, for great chances of availing the benefits of such programs, it is best to check with your financial aid office to see if the school you wish to attend offers its own loan program. This will also allow you to know if you qualify for the loan, before you submit a PLUS loan application.
Many experts agree that you should borrow student loans in college only the amount that is necessary. As mentioned earlier, it is often tempting to borrow whatever you are offered or are eligible to borrow. However, it is necessary to think first carefully about how much you really need, as well as to consider other possible options. This will help you on the path to understand the things you need for college.
Always note that there is actually no need for you to borrow the entire amount shown in your award letter. And, even more important is that, never plan to borrow as much as you can up the yearly limits because if you do so, expect yourself to be deep down in debt.
If you are thinking to borrow money to support your education, try to ask yourself first if you have savings left that you can use instead of taking out a student loan from the school of your choice. Also, think if you can get by with less by way of holding down expenses, or if you can do something great, like working more, either in the academic year or during vacations just to support your education. Also, think for the possible scholarships that you can apply for, or you can be qualified for. There are actually a lot of options left for you out there. The best move to take now is to know and understand them.
It is worthy to note that the more you borrow for your education, the higher is the amount of your monthly repayments will be once you finish your degree. So if possible, try to estimate your loan payments. There are a number of student loan repayment calculators out there that you can use to do the math. What’s more, you have the chance to calculate your monthly payments based on the estimated starting salary of your chosen occupation.
Now that you have pondered enough about your student loan with the things you have to consider before borrowing, as well as with the amount you need to borrow, I guess it is now important for you to look at the most recommended tips for borrowing student loans. Just consider the following:
As mentioned, planning and thinking your moves for taking out student loans in college is very necessary for a successful borrowing. Understanding the basic things you need for college is key. If you do consider what have been mentioned above, then there is no doubt for you not to attain your dream education, and even a successful career in the future.
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