Q: Are private student loans my only choice after FAFSA to get money for college?
A: Before answering this question it is important to state that private student loans for college should be a students last funding resource to help cover the costs of college. Most college financial aid experts (and even reputable private student loan lenders) will agree that students should exhaust all federal financial aid and free money options for funding college before utilizing private student loans. Private student loans can be a useful tool for bridging the gap from what scholarships and federal financial aid have provided you with to what your actual college expenses are, however because private student loans are based upon credit, tend to have high interest rates, and less flexible repayment options, it is generally in the students best interest to use private student loans only after all other financing options have been exhausted.
If private student loans are a students only choice left for funding their education after they have applied for FAFSA will depend on what other college financing options they have applied for and/or utilized. By completing the FAFSA a student is applying for all federal college financial aid programs, including federal student loans, federal grants for college, and/or federal work-study. If the student has yet to apply for any college scholarships, this should be the next step. Scholarships for college come in a variety of different amounts, and are awarded for a variety of different reasons. College scholarships are the best tools for financing a student’s college education because they provide the student with money that will never need to be repaid. Students are encouraged to apply for scholarships that have both large and small award amounts, as any amount a student can receive in a scholarship award is money that will not need to be taken out in a student loan. In addition to college scholarships, students may want to consider some other funding resources to help pay for school before applying for a private student loan. Students can view our “College Financial Aid Tips” section for 45 different ways to save money for college, reduce the costs of college, and get free money for college. For students who choose to utilize a private student loan as part of their college-financing plan, make certain to do your research. All private student loan lenders and private student loan products are not the same. Students should compare lenders, terms, and interest rates to make certain they are getting the best possible private student loan. For more on private student loans view our Private Student Loan section.