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Options to Consider When Applying for Student Loans

You’ve been accepted to college. Congratulations! This is an accomplishment to be proud of, and we’re sure you’ll make the most of the opportunity. Now that you’re in, you have another hurdle to get over: how to pay for it. Unless you received a full scholarship or you have access to a substantial nest egg, there’s a good chance you’ll need financial aid. Of the many types of aid available, student loans are probably the most common, so let’s take a look at what you should know, and compare some of the different programs you’ll encounter.

First, it’s important to know exactly how much funding you’ll need. This will include not only tuition, but other expenses such as activity fees, books, and supplies. Depending on your living arrangements, room and board can be just as expensive as tuition. All these factors and more should be considered in your loan application.

Even if you’re looking at a private school, you can still apply for and secure a federal student loan. While there are limits to what can be borrowed from the government, the benefits are lower fees and interest rates. Also, federal loans come with protections and benefits, such as the option to defer payments if you encounter financial challenges after graduation.

There are more variables to consider with private loans, including higher fees and interest rates, but private lenders don’t have the same limits on what can be borrowed. If your expenses will be more than what you can borrow in a federal loan, it might be a good idea to look at what private lenders might offer. As with any other loan, shop around and compare options.

One final consideration: how long you plan to take paying your loan back. Some professions pay a generous salary upon graduation, while others might require you to work your way up. Be realistic when thinking about the length of your loan, and when in doubt err on the side of caution. For comparison purposes, the standard repayment plan for federal student loans is 10 years, though it takes many people much longer.

A college degree is one of the wisest investments you can make in yourself and your future, so don’t be afraid to take out student loans if that’s what it takes. Just make sure you go into a loan with eyes wide open: know your expenses, research the best options for you and your needs, and give yourself enough time to pay the money back.