For students and parents of college students, it is highly important that you learn as much as you can regarding financing your college education. Blindly jumping into any student loans you find along the way, could result in financial disaster. We have complied 5 Student Loan Tips for Students and Parents that every student and parent of a college student should know:
1. Start early and research all of your available options.
Saving money for college is an obvious method to help avoid student loan debt, however there are some less obvious methods such as taking AP classes while in high school which can provide you with free college credits, and thus less money needed in student loans. If you are currently in high school, set up an appointment to meet with a guidance counselor at your school, and ask about the options available to earn college credit. If you are out of high school, and currently employed, you will want to check with your employer to see if they may cover any of the costs associated with your continued education.
2. Consider community and technical colleges.
Individuals may want to highly consider a community college for their first 2 years of study. This could save you loads in tuition and most community colleges have guarantee transfer programs to the local 4 year university if you can maintain a certain grade point average.
3. Stay in-state, stay public.
If you must go to a 4 year university or college right away, selecting an in-state public university can be a good financial decision. Private or out of state colleges will typically always cost you more money.
4. Go for grants and scholarships. Always apply for FAFSA.
Before you consider any student loans (federal or private), be sure to look for grants, scholarships, and other loan alternatives such as work-study. Scholarships and grants provide you with money for college that will never need to be repaid, passing up the opportunity to apply for scholarships and grants, can be like leaving free money on the table. Students should also always apply for FAFSA. FAFSA is a free application for federal student aid, which encompasses grants, federal work-study, and federal student loans. If you fail to apply for FAFSA, you could be missing out on free federal grant money for college that you may qualify for. In addition, just because you qualify for federal student loans through FAFSA does not mean that you need to accept them, so students really have nothing to lose by completing a FAFSA.
5. Private student loans are a last resort.
Private student loans should be your last resort for financing your college education. Private student loans will likely always have the least flexible repayment terms, and highest interest rates, making them among one of the most “expensive” ways to finance your college education. If you must use a private student loan, you are really going to need to compare your options in order to make sure you are getting the best deal possible. NEVER take out more money in private student loans than you absolutely need for your college expenses. Spending your private student loan money on unrelated expenses can put you deep into debt and really damage your financial future.