Congratulations on being accepted to college. This is quite an accomplishment in and of itself. Now comes your next hurdle: how to pay for it. Unless you were lucky to receive a full-ride scholarship, or have a substantial nest egg saved since birth, there’s a good chance you’ll need to consider some form of financial assistance. Before you begin borrowing, it’s a good idea to take a look at your options and compare different programs that are out there.
Here’s just a few points you’ll want to consider with student loans to help you decide which direction to go in:
- Have an Idea of How Much You’ll Need: While you might have funds to cover the cost of tuition, there are other expenses you’ll need money for when you head out to school. Room and board can be as costly as a tuition. Add in student activity fees, books, supplies, and other odds and ends and college can get pricey quick. Make sure you have a realistic figure when you look to apply for loans compared to cash on hand.
- Federal Programs Are a Viable Option: Even if you’re going to a private school, you can still apply for and secure a federal loan. There are limits to how much you can borrow from the government: $31,000 for dependent grads and $57,000 for independent grads in four-year programs. And some even cap freshmen’s first-year loans at $5500 if they can be claimed as dependents. However, the advantages here are lower fees and interest rates for borrowing. Another nicety is that federal programs come with borrower protections, such as the ability to defer payments during tough times.
- Private Loans: Here you’ll find a lot of variables with fees and interest rates as set by the lenders. Also, you’ll want to check your options for borrower protections, as these are set by the lender. However, private lending can be the way to go if your expenses are above what you can get from a federal loan. Shop around and compare your options and find the right lender for you.
- Length of Loan: The final factor to consider is how long you’ll be paying for your college education and will you be able to afford it based on your degree and job prospects. While some professions pay well right out of the gate, other majors might not lead to substantial incomes immediately. Keep in mind how much you think you can afford after you leave school.
Securing the right loan can make all the difference when it comes to your college and your future. Know your expenses, do your research and plan ahead.
