Student Loans – Borrow Responsibly
While college can be a very expensive venture, it’s hard to get anywhere without a degree. If you want to make more than a mediocre income for the rest of your life, going to college is probably your best bet. However, affording a college education can be nearly impossible. While there are several student loan options available for college goers without the benefit of a fully loaded college fund, student loan debt can be a steep hole to climb your way out of. It is estimated that up to two-thirds of college graduates leave school with student load debt. Before borrowing for your education, consider the following.
Free is Good
Free stuff is always good, right? Grants and scholarships are both free sources of money for school that everybody should take advantage of when they can. Apply for every grant and scholarship available to you. Only after you have exhausted the free money possibilities, should you apply for loans.
Know Your Loans
There are different types of loans and each requires different rules be followed. They each have their own guidelines and criteria. Educate yourself on your options before you apply. The very first loan that you need to look into, if a loan is needed, is a non-interest bearing loan. While you will still be expected to pay it back, it won’t acquire interest at all.
Depending on your major and your target career, your earning potential can vary greatly. Always
consider what you’re likely to be earning once you graduate before you acquire any amount of loan
debt. Some professions take years to work your way toward any high-paying position. Most student
loans become due 6 months after graduation. Student loan calculators are available to estimate your monthly payment, based on an estimated borrowed amount. Is this something you will be able to afford?
Set a Limit
After figuring the total amount of your tuition and available grants and/or scholarships, estimate an
amount that will be left unpaid. If this is a reasonable amount of debt for you to have upon graduation, great! If not, you might want to look into getting partial loans and making tuition payments to cover the rest. Either way, once you find out what you will be able to afford to pay back, limit yourself to this amount and don’t over-borrow.
Know the Stipulations
Every student loan is dependent on certain things. Most are only available for full-time students. Some have a GPA requirement. If you need to take a semester off from school, you need to make sure your student loans will allow that. Reading all the information before signing on the dotted line is important. Know exactly what you’re getting into.
The idea behind going to college is to set you up for the future. The last thing you want to do is over borrow and wind up less financially secure than you are now. Do your homework and be realistic with yourself and you can responsibly borrow without setting yourself up for failure.
Steven Henning contributed to this article, he enjoys writing about finance, investments, and the importance of maintaining a good credit score.