How Refinancing With a Private Student Loan Saves Money

Overall, about 45 million Americans owe over $1.6 trillion in student loan debt. The average student debt is almost $30,000. That is quite a scary number.

Of course, the number can fluctuate from person to person. My student loan debt exceeds $100,000. Others only need to borrow a few thousand.

Regardless of the amount, student loan debt is a heavy burden to bear and everyone wants to get out from under it. We hear of potential get out of debt options and want to take advantage of them, but they can be a tad bit confusing- sometimes more than a tad bit.

Refinancing your student loan with a private student loan is one of those options, but it does not have to be confusing. We are going to go over the ins and outs, ups and downs of refinancing with a private student loan so you can determine if it is the right move for you.

Ways Refinancing With a Private Student Loan Saves Money

I would love to tell you that refinancing with a private student loan can solve all of your problems, but that would be a lie. It can, however, offer some benefits that may far outweigh the consequences and risks for you. Let’s take a look at the good side of refinancing with a private student loan.

Interest Rates

One of the best ways that you can save money on a student loan is by refinancing with a private student loan is through the interest rate. Sometimes, a private student loan can offer a much lower interest rate, and even a 1 percent variation in your interest rate can make a big difference in the overall amount you pay.

A $1,000 loan with a 6 percent interest rate means you will pay $60 in interest. At a 5 percent rate, you will pay $50 in interest. Granted, that is not a big difference by itself, but most of us owe much more than $1,000 on student loans. Additionally, that interest is simple interest. If the interest is compounded, that difference grows exponentially.

Do remember, though, that not all private loans will offer a lower interest rate. Some will offer lower interest, but the extra costs wipe out the benefit- more detail about this in a moment. If you are going to refinance, do some shopping around before choosing a lender to make sure you are getting the best rate.

Longer Repayment Terms

When you refinance with a private student loan, you can choose a longer repayment term. In ways, this can save you money- especially on a monthly basis as you are not paying out as much. Additionally, if the interest rate varies and goes much lower down the road, you will save in interest.

If you want to find a private student loan and don’t know where to look, Loanry can help you make loan shopping a little bit easier. Enter the information below and see which lenders may offer a loan for you.

Lower Monthly Payments

For the most part, refinancing your student loans mean that getting a new loan that has more favorable terms. This usually means extending your payment term, but not always. This really depends on you. If you have 15 years left on payments, you might choose to refinance for another 15 years or you may choose 20 or 25 years. It will depend on your decision, though sometimes the lender will decide according to your financial situation.

If you choose a longer repayment term, you will have lower monthly payments. This does not necessarily mean that you will owe less overall, but it can help you save money every month, which you can then put toward paying off other debt, invest, or any number of things that can help you financially.

While extending your repayment term can help you with lower payments, it is not always worth it. Take a look at the terms of your loan offer and determine how much interest you will pay over the life of the loan. If you will be paying thousands more in interest, refinancing with a private student loan is probably going to cost you a lot more than it saves you.

Difference Between Refinancing and Consolidating

With such high student debt, it should come as no surprise that student loan borrowers are looking for debt relief. Two common ways of doing this are student loan debt consolidation and student loan refinancing, but these often get confused with one another. Let’s see if we can clear the confusion before moving on.

Consolidation means that you put multiple debts into one debt and then make one payment each month. Perhaps you owe $50,000 in student loans that come from five separate loans, meaning you are making five payments each month. This can be expensive and confusing. Instead, you could consolidate all of those loans into one $50,000 debt.

Refinancing means trading one loan for another. Basically, in the $50,000 case, you would borrow the $50,000 from another lender, repay your loans, and then pay monthly to the new lender. You might have to borrow more than one loan to do this, depending on how much you can get approved for each loan. For instance, you might have to borrow five $10,000 loans instead of one $50,000 loan. As refinancing can only be done through private lenders, your approval is based on your credit.

When Refinancing With a Private Student Loan Could Hurt More Than Help

Like I said, refinancing with a private student loan cannot magically solve all of your problems. In fact, there are times that it can actually create some. Refinancing with a private student loan can be really beneficial at times, but there times that it can hurt your wallet much more than it can help. It will ultimately be up to you to compare the pros and cons to decide if it is a good idea. Consider the following when you are thinking it through:

New Loans Mean New Fees

Remember those extra costs I mentioned a moment ago? Let’s dig into those for a moment. When you take out a loan, there are often fees that come with it. The names and types of fees depend on the type of loan you are getting. For instance, fees for a mortgage are called something different than fees for student loans or even cars.

Regardless of their names, they are all fees, which means you pay out more money. Not all loans charge fees, but it is important that you know if yours does. Some fees are expensive- expensive enough that they offset any savings you could get by refinancing with a private student loan. Some are low enough that it is still worth it.

Still, you need to be aware of any associated fees and be sure that it is worth refinancing. If you will not be saving money, extending your repayment term, or at least lowering your monthly payments, there really is not a reason to refinance.

Swapping to a Private Student Loan Means Missing Out on Special Programs

One of the best things about federal student loans is the programs that are available. For instance, if you happen to experience financial hardship, you can apply for an income-driven repayment plan. Depending on your situation, your payments can be lowered all the way down to $0 per month while you are experiencing your trouble.

There are also student loan forgiveness programs that only apply to federal grants. If you do refinance with a private student loan and have any financial trouble, you will not be able to take advantage of the government programs. This does not have to be a deal-breaker, but it should make you stop and think. If you are already struggling a lot financially, do not have a very secure job, or expect any negative changes to your finances, you should probably stick with federal loans.

Other Refinancing Facts to Consider

There are a couple of additional things you should know before making your decision.

You Can Refinance More Than Once

Here’s some good news: There is no rule that says you can only refinance once. Let’s say that you do end up having some trouble making your refinanced loan payments down the line due to job loss or some other factor. While you cannot take advantage of government programs, you can try to refinance with another private student loan to get lower payments. If you have been making your payments on time for a while, your current lender may even refinance your loans for you.

Additionally, some lenders offer periods of deferment due to job loss. This is not true with all of them, though. Be sure to find out when you initially refinance so you will know what options are available to you.

You Can Use Refinancing to Simplify

Having to pay multiple loans can get irritating and exhausting. When I look at my student loan service provider’s website, my anxiety kicks in and I get a headache. This is not because of the amount I owe- though that alone is enough to induce panic. My problem is actually trying to figure it all out.

With the more than $100,000 I took out in student loans, there is what seems to be a never-ending list of smaller loans to make up the full balance. Each has its own interest rate and other details. Any time I try to formulate a plan to pay them off, I freeze up. And considering I am normally a very effective planner, this says something. There are just too many loans to dig in and figure it out.

That is one thing I love about both refinancing and consolidating- the potential to simplify. It is usually a little easier to consolidate your loans through the government or your loan service provider, but if you can get approved to refinance a large amount, you can still decrease the number of loans you have out. Can you imagine only making one or two payments a month instead of making 10 or more? I don’t know about you but I could definitely help my nerves.

Private Lenders VS the Federal Government

Here is an important thing to note: Private lenders can refinance federal loans but the federal government does not consolidate private loans. This means that if your loans include private ones, the government will not be able to help you with those. You can still take advantage of their ability to consolidate your federal loans, but you will have to take care of your private loans separately. Or you could use a private lender to handle all of your loans.

Before Refinancing With a Private Student Loan

If refinancing sounds like the choice you want to make, there are a few things you need to do before applying.

Think It Through- Again

First and foremost, think about it again. I listed pros and cons here but they may seem a little vague to you. Sit down with this guide, a pen, and a piece of paper. Reread the pros and cons and turn them into more personal facts. You need to know that you are able to make payments on time, or you can end up with a default on your student loan.

For instance, you might say something like, “Refinancing for a longer-term means that I can have lower monthly payments. With the money I save each month, I can pay my mortgage off quicker” or “Work one less day a week so I can spend extra time with my family” or whatever your thoughts are.

Doing this will help you determine how refinancing may or may not actually help you, help you determine what your motives are for making the move, and help you have a plan for what to do with any leftover money. Through this exercise, you will be able to make a much more informed decision about what to do.

Check Your Credit

Remember, your credit is what will get you approved or rejected for a loan and determine your interest rate. For the best results, you, of course, want a really good credit score. Before you make any moves, check your credit.

There is no magic number for approval as each lender has their own criteria. However, the higher above 600 your score is, the better options you usually have. If you are in the low 500s or even lower, you might be much better off consolidating your loans through your loan service provider or a government program. Cleaning up your credit takes time, and the lower it is, the longer it usually takes. Unless you can make some drastic changes in the next month or two, refinancing with a low-interest rate might take too long. And if you are already struggling to pay, you need faster results.

If, though, you have a bit of a higher credit score but it is still not quite high enough to lower your interest rate, you could make some quick changes to your credit. Obviously, what you can do and how fast you can do it depends on what is on your credit, but here are a couple of ideas:

  • Try disputing anything that is not correct, including any personal information like old addresses or employers
  • Try to pay off or pay a very large chunk of what you owe to a debt on your credit
  • If something is about to hit your credit, like a collections account, contact the creditor now and try to work out a payment plan. This could prevent the debt from ever hitting your credit report at all. **Notice I said “could”, not will. Some creditors will report it anyway while you pay on it. Some will work with you to keep it off. Just talk to them and see if they will not report it as long as you make your payments**

Gather Your Information

Any time you are going to apply for credit, you need to have your documentation ready. This includes your personal information, of course, like your ID, social security card, and proof of income. Also, take any proof of collateral you have.

When you secure the loan with something of value- like a piece of property or a car- you have a better chance of a lower interest rate and a higher loan amount. Do not, however, secure your loan with anything you cannot afford to lose. It is better to simply consolidate through the government than to refinance by using your home as collateral and then using your home.


If you are in a lot of student loan debt and are looking for a way out, refinancing with a private student loan might be a good move for you. Just don’t dive into the deep end head first without looking down at the water below. Consider your options carefully and seek professional advice if you feel overwhelmed by the decision.

How to Avoid Common Student Loan Scams

Worried graduate student shaking a piggybank isolated on white background.

Student loan debt is extremely high and is a major topic of conversation. With financial topics like these, they tend to be the target of scammers. At least three out of five people have received a phone call from an illegitimate company that claims they are the solution to your higher education loan debt.

Sadly, due to desperation, fear, and other emotions, many borrowers fall for the tactics of these scammers. Don’t be one of them. Below, we are going to discuss common student loan scams, how to spot them, and how to protect yourself from them.

How to Recognize and Avoid Student Loan Scams

When looking for a lender, you need to be very careful and do your research. Make sure you are choosing the best option for you. You can always look for help here, on Loanry!

Pay full attention if you want to sign up for a student loan or maybe for a personal loan for students. These are some of the most common signs of fraud that have been detected up to this point:

Upfront Fees and Monthly Fees

Most student loan scams will require that you pay upfront fees for their services or monthly fees. You will likely hear this a couple of times through this article, but it is important. Charging a fee for services does not automatically point to a scam. However, it is against the law for any debt relief help to charge fees before getting your results. There should be no upfront fees for the service at all, so if someone is trying to charge you before they do anything, run the other way.

As far as monthly fees go, they are not necessary. Understand something: You do not have to pay to receive grants or scholarships. Even if you get private student loans, you do not have to pay upfront. You also do not have to pay for things like:

  • Filling out the FAFSA
  • Changing your repayment plan or payment amount
  • Loan consolidation
  • Deferred payments
  • Loan forgiveness or other government programs

Every bit of those things is free of charge. Occasionally, scholarship providers may require an application fee. This is not necessarily unusual or a scam. If you are trying to apply for one that does ask for a fee, look into the scholarship first. Your school should be able to help you do this. A simple Google search can usually find pertinent information as well.

As far as any current student loans go, you can handle any business you need to directly with the loan service provider. My student loan service provider has an excellent website- as most of them do. I have the ability to change my payment plans, apply for an income-driven repayment plan or other plans, and more. I even have the ability to choose which of my loans get my payment if I want to pay a different one than the one they have placed as first in line.

And if I have any questions, I can contact them directly through the website- no middle man required. Don’t pay for something that you can do yourself for free. And do not be fooled into thinking you cannot do it yourself. Take a look at, too, for anything related to federal student loans.

Aggressive Sales Tactics and Urgency

Everyone I know has experienced the tactics of a salesperson. They push and push and push to get you to buy. They make you fear missing out on a deal so you hurry and sign up immediately. The harder they push, the more you know that their paycheck probably relies on the commission from your purchase.

Unfortunately, student loan scams tend to be worked by experienced salespeople. They know what to do to push you into a decision you probably would not make otherwise. If you feel pressured to sign up, take a step back, and look into the company.

Improper Grammar and Spelling

Grammar and spelling mistakes are not all that odd. It is easy to accidentally press a “T” instead of an “R” on your keyboard, or something similar. It is also not unusual to get so caught up in your writing that you type “your” when you mean to type “you’re”.

While everyone can make an occasional spelling or grammar mistake, many communications from companies that pull student loan scams contain a good deal of them. It is not always the number of errors, though. Sometimes it is the errors themselves. Unusual errors are a good sign that the company is fraudulent.

Most legitimate companies have fewer errors. This is because many of them have a spell check program on their computers. They also tend to actually double-check their work.

Don’t get me wrong- bad communication does not necessarily mean that it is one of the student loan scams. Even those of us who write for a living like me make mistakes and do not always catch them. These mistakes are more of a red flag than a full stop sign. If you receive a communication like this, take a beat and check into the company.

Asking for Authorization

A lot of companies committing student loan scams ask for things that they have no business asking for, such as your social security number, your FSA ID, your sign-in information on your loan service provider websites, or even for you to sign a power of attorney agreement giving them the power to “negotiate” your accounts. Please pay attention: No legitimate source of student loan help will ask you for any of that information. If you give these scammers any of that information, you could end up in a lot of financial trouble. You absolutely never know what they will do with it.

If them messing up your finances is not scary enough, think about all of the information that your student loan service providers have: Your identifying information, any income verification you turn in, family information, your home address, your telephone number, credit card information, and more. They can use this to steal your identity, clean out your bank account or credit accounts, and more. And, let’s just be honest, there are stalkers and others out there who might use your home address for other reasons. So, do not give out this information.

The Threat of Legal Action

Have you ever received one of those phone calls that tell you if you do not take immediate action that day, a law enforcement officer will be at your house that afternoon? I have, and the first time, I was scared to death. Fortunately, I had missed the live call and heard this threat on my voice mail, so I did not have to respond to a person immediately.

Instead, I searched my brain for anything that would warrant such action and finally called a friend to share my fear. Turns out, she had just experienced something similar and told me that it was a scam. After no law enforcement officer showed up at my house that afternoon- or any afternoon thereafter- I realized that she was right.

People that scam others play on their emotions. One of those emotions is most definitely fear. If they can make you afraid enough to believe that you will be in jail, there is a good chance you will do what they ask. Let’s alleviate some fears, shall we?

I cannot think of one single civil or consumer debt that you can be jailed for in America. If any debts can put you in jail, it is those such as unpaid taxes or unpaid child support. However, even those do not typically put you in jail automatically. There are court proceedings and warnings and a process.

Additionally, you do not get phone calls for stuff like that- unless it is from a lawyer you hired. Courthouses do not call. They send out official letters, usually dropped off by an official delivery person or process server.

Other debts, however, like credit cards, loans, and such do not put you in jail. They can ruin your life in ways like keeping you from getting credit, buying a home or car, getting good interest rates, and possibly even getting certain jobs. Imprisonment is a totally different story.


A lot of companies running student loan scams will claim to be affiliated with the Department of Education. While the Department of Ed does work with some companies, most companies that claim an affiliation are lying. You can look at the Department of Ed’s website to see what trusted companies they work with, but remember, you are not required to pay for help with student loans. If someone is trying to charge you, know that you have many free options.

Advertising on Social Media

Many student loan scams are advertised on social media. It costs money to advertise online, especially on social media platforms. Most companies- regardless of the industry- that pay for advertising are for-profit companies, and for-profit companies are looking- obviously- to make a profit off of you.

Making a profit does not always mean it is one of the student loan scams. There are professionals you might hire, like a lawyer or an accountant, to help with your student loan debt. The difference is that you usually seek those people out instead of them seeking you out. Therefore, if you see an advertisement on social media or somewhere else online, do not put your personal information in. If you are interested in the offering, do some research first.

Common Student Loan Scams

The number of student loan scams in play will likely continue to grow over time. And they will probably get more and more creative. Don’t let them fool you and don’t think that you will save money on your student loan with their loan options. For now, though, there are some common ones to look out for:

A Stop in Your Loan Forgiveness

Scammers use fear and urgency to get results. If someone calls you or sends you a notice that your loan forgiveness is about to end, ignore it unless it is straight from the Department of Education or your loan service provider. If there really is going to be a change, one or both of these two organizations will send you an official notice.

Additionally, even if the government decides to make changes, it will not happen overnight. Things like that take time to move through all parties that must agree on them. It also takes time for things to be put in place. So, if there is going to be a change, you will know about it way ahead of time- not a few days or a few weeks beforehand.

Total Loan Forgiveness

One of the most common student loan scams is when companies offer total or fast loan forgiveness. There are a couple of things for you to know here. First, only special circumstances can completely discharge your student loans. This tends to be things like:

  • Death– and no one wants to die to avoid student loan debt
  • Disability– not a temporary disability but extreme and permanent disability
  • Bankruptcy– in some very, very rare circumstances
  • Public Service Loan Forgiveness and Teacher Loan Forgiveness– for borrowers who work in certain job types for a specified amount of time

The second thing to know is that none of these circumstances can get your loans discharged quickly. They all require a certain process and can take up to years to work fully. Companies claiming that they can do this for you are committing student loan scams- stay away from them. If you feel that you qualify for student loan forgiveness, you can speak to your loan service provider about it.

Loan Repayment or Loan Debt Relief

If a company claims that they can settle your debt for lower than anyone else or that they can get you a special deal, it is not true. While debt relief companies can help you settle your debts for lower than the original amount, they cannot get better results than you or any other company can. If you choose to use a debt relief company, that is up to you. However, do not hire a company over because of an untrue guarantee.


The Better Business Bureau warns of another of the popular student loan scams: Federal student tax. Scammers call unsuspecting borrowers claiming to be IRS agents or even FBI agents saying that they owe a federal student tax. This scares borrowers into paying these scammers to stay out of legal trouble. Here is what you need to know:

  • There is no such thing as a “federal student tax”. This is a completely made-up term
  • If you owe the IRS for anything, you will receive an official notice- not a phone call
  • The FBI does not collect debts, and they certainly will not call you asking for money to do such. If any legitimate agency needs to contact you, they will send official notices or show up at your door with official badges. Even then, you can make calls to verify their identity. The FBI is no stranger to scammers, so the legitimate organization will have no issue with you verifying someone’s identity. But again, they are not debt collectors, so if someone shows up or calls about your debt, hang up or shut the door

Reduce Your Risk of Being Scammed

  • Only apply for student aid on the official FAFSA website to prevent illegitimate sites from intercepting your information. After completing the application, completely close out of your browser.
  • Your FSA ID and your login information are for you and you alone. Do not give them out to anyone. Remember, legitimate sources will not ask for them.
  • Keep as much of your personal information as possible securely at home. Do not carry it around with you.
  • If you feel you have given your information out to any illegitimate source, reach out to the supplier of that information- such as your student loan service provider, your credit card company, and so on. And immediately change any login information and passwords, cancel credit cards, and take any other precautions you can. The quicker you make these moves, the better chance you have of stopping trouble before it starts.
  • Always, always, always check that any website you are entering personal information on is secure. You can easily do this by looking in the web address bar for a little lock. If it is there, the website should be secure.

Companies Known for Student Loan Scams

There are several companies that are known for student loan scams. Unfortunately, these scammers often simply just open up under another name. However, the FTC does share a list of companies that are known for student loan scams here, so be sure to check it out.


While organizations do work hard to prevent scammers from succeeding, it is up to each one of us to protect ourselves and our families. Learn all you can about scams as they are outed so you know what to look for. Above all, remember that if you need any help with your student loan debt, you can go straight through your loan service provider or the federal government for help.

If you are contacted by what you feel is an illegitimate company, report it so that others can be made aware. You can do this through your loan service provider, the FTC, or your state attorney general’s office. These complaints are taken seriously and you can trust that they will be investigated.

How to Get Grants for College to Avoid Student Loans

Happy smiling millennial girl holding paper document, received good news letter, university admission notification.

College is not cheap- this is a widely known and well accepted fact. While tuition varies depending on the college and degree, you are looking at spending at least tens of thousands of dollars. As nice as it would be, most of us do not have that kind of money lying around, so we have to find a way to pay for it.

Grant Options for College to Avoid Student Loan Debts

For many people, student loans immediately come to mind, but those should be a last resort. Trust me when I say that student debt is not something you want to deal with. My student loan debt is over $100,000. I could literally have bought a house with that amount. And the monthly payments are more than $1,000, which is a very big portion of my income. I often feel like I would have been better off skipping college and just working my way up through some company, and that is not a good feeling after you have worked hard to earn your degree. If you can avoid feeling that way, you definitely should.

Student loan debt is difficult to get out of, and most people stay stuck in it for years and decades. The average student debt ranges from $26,900 to $55,882 depending on the state and the type of school the student attends. Overall, according to student debt statistics, Americans are in more than $1.6 trillion of student loan debt. Sadly, a lot of this debt could have been avoided, but most people are not aware that there are other options available.

Before you resign yourself to debt, you should look for grants for college. Grants do not have to be repaid, so if you can get grants for college, you can avoid that student debt. At the very least, even if you have to get some student loans, you can minimize your student debt by getting grants for college.

This guide is intended to give you a starting point for getting grants and some information on grants that you might qualify for. It is in no way all-inclusive, but it can give you a great start.

Fill Out the FAFSA

The first step you need to take for any type of financial assistance is to fill out the FAFSA- the Free Application for Federal Student Aid. It asks you a series of questions regarding your financial information. If you lived with your parents the previous year, it will also ask for their information.

Before going any farther, let’s address the fact that not every student’s parents will be willing to help with the FAFSA and some are not able to. This does not automatically disqualify you for aid. If your parents are unable to provide their information due to being mentally incapacitated, incarcerated, or they are abusive, you can fill out the FAFSA, indicate that you cannot provide their information, and then call the financial aid office to apply for a student dependency override.

If your parents are simply unwilling to help, it changes things a little. You should still fill out the FAFSA and indicate that you cannot provide your parents’ information. Then, as soon as possible, call the financial aid office at your school to explain the situation. The lack of parental information may disqualify you for some aid, but not all. If there is anything you can apply for, the aid office should be able to help you. Many grants are not dependent on parental information, anyway.

After you have filled out the FAFSA, you will receive a Student Aid Report (SAR). It will provide your EFC, or Estimated Family Contribution, and the estimated amount of aid you might qualify for. This report will let your college know if you will qualify for grants, how much of your tuition should be covered, and if you will need additional aid.

Even if you do need more aid for school, you do not immediately have to jump to student loans. There are other grants for college that you may be able to receive and you should exhaust those possibilities first. Let’s go over some of the most common grant options:

Federal Grants for College

Federal grants include Pell grants, one of the most well-known grants in America. These are grants that are based on financial need. Most Pell grant funds go to students whose total family income is less than $20,000, though the family income of up to $50,000 sometimes qualifies.

There are other stipulations, such as the student is looking to earn their first Bachelor’s degree, but exceptions are made for some post-graduate degree programs. The amount of the Pell grant often changes every year, and student awards are determined by different factors. However, the maximum Pell grant amount for the 2020-2021 school year is $6,345.

That amount is enough to cover some community college tuition. When I attended my local community college, the Pell grant was enough to pay for all of my classes and my textbooks. Even if it does not pay all of your tuition, it can still help tremendously.

In addition to the Pell grant, you might qualify for the Federal Supplemental Education Opportunity Grant (FSEOG). Every year, the schools that participate in this program receive a set amount of funds. The school then determines which students have the greatest financial need and award them some of those funds, which could be anywhere from $100 to $4,000. This is a program you should look into as early as possible. The schools only receive these funds once a year, and once the money is gone, you have to wait until the following year.

State Grants for College

After federal grants are state grants for college. The types of grants available vary according to the state.

Some states provide grants to minorities. Others might specialize in assisting those with a disability or who were in the foster care system. Other states might award grants to students in certain fields that desperately need to be filled in that state. Your school or state agency should have the necessary information for these grants.

Grants for Women

As there is an apparent difference between men and women in their opportunities and income levels, some organizations have taken an active role in making changes. There are several grants available specifically for women, including The P.E.O. Program for Continuing Education and the Soroptimist Live Your Dream Award.

Grants for Minorities

There are also grants geared toward ethnic minorities, such as Asian Americans, Hispanics, Native Americans, and more. Sometimes, these grants will be made available through filling out the FAFSA. Others take more research, but your school should have some information on them.

Do not just think about the federal grants available to minorities, either. Check with any ethnic organizations or groups. I am Native American. The tribe I am registered with providing a certain amount of grants and scholarships each year. These are apart from any that my schools knew of. It is always best to do your own research as sometimes private organizations do not advertise their grant programs.

TEACH Grants for College

If you are going to school to be a teacher, you should look into TEACH grants for college costs. While these do not have to be repaid, you do have to agree to teach in a school that is in an underserved area for four years after graduation. It seems like a pretty good trade off – you get help with college costs and you get the chance to impact the lives of children who need caring teachers.

Military Grants for College

If one of your parents served in the military in Iraq or Afghanistan after 2001 and passed away because of it, there are grants available to you. Talk to your school counselor or the financial aid office at your college of choice for information on these.

School Grants for College

Individual colleges also have sometimes have grants and scholarships for their students.

I was once awarded a scholarship for keeping my GPA high in the first two terms of college. The award was only about $800 each term, but that definitely helped cut back on my student loans.

Talk to your school about what is available from them. They might not be available in your freshman year, but you can start working toward them from the beginning.

Academic Competitiveness Grant (ACG)

The Academic Competitiveness Grant is an additional aid for those who qualify for the Pell grant. In order to be eligible, you have to have completed what is termed a “rigorous secondary school program of study” with a minimum of a 3.0 GPA. The Secretary of Education determines what programs qualify each year, but it is referring to programs such as Honors and AP courses. You can speak to your school counselor about the ACG- he or she can help you determine if you are eligible.

SMART Grants for College

Pell grant recipients should also consider the SMART Grant program, which is the National Science Mathematics Access to Retain Talent. It is awarded to students who are entering STEM college programs, foreign languages, and other high demand careers. There are other requirements, including being a junior or senior in your degree program and having a minimum 3.0 GPA. This award is up to $4,000 per year.

Special Interest Grants

If you are a musician, artist, photographer, vocational student, or something similar, you might be able to find grants for your specific interest. These may require a little more research on your part as they will likely come from local organizations, but you might find some that are nationwide. Talk to your teacher as they probably have some inside scoop.


Every year, there are writing competitions, art competitions, science competitions, and more. Some of the prizes include grant and scholarship money. Whatever you are interested in doing, look for competition. Enter as many as you can that award college aid or cash to the winners.

Employer Grants

If you have a job, your employer may have their own grant program. I have heard of quite a few companies having grant and scholarship programs. Some were large and others were small. If your employer does not, ask your family members if any of their employers do. You never know what you might run across.

Tips for Getting Grants for College

Start Early

One of the biggest mistakes among college students is waiting until the last minute to apply for their financial aid. Doing so is only working against yourself, though. If you can, it is a good idea to start your research in your freshman year of high school. Even if you cannot yet apply, you will know what you need to do to be eligible and can mark the application date down now.

If you are past your freshman year, it’s okay. Just start as soon as you can. Even if you do not have time to apply for them all this year, you can always apply next year.

Apply for as Many as You Can

As you can see, you can get more than one grant at a time, so there is no reason to only apply for one. You should take the time to apply for as many as possible. Who cares if you have to get 10 small grants? It all adds up. If you apply for enough, you might not need a penny of student loan money.

Apply Every Year

Applying for grants should not be a one time thing for your entire college career. You should be searching for and applying for them every single year. Some grants are not available until you have completed a certain number of classes, like the SMART grant mentioned above. The award I received only came after I completed a full year with that high GPA. Take some time each and every year to research what you qualify for.

Stay Organized

In the midst of applying for 35 grants for college, it is easy to forget what you have and have not yet done. You should try to maintain a list of the grants you have applied for and need to apply for. You can keep this on a sheet of paper if you like, but if you have a spreadsheet program, you can keep up with more details to help you stay on track. Start by making the following column headings:

  • Grant Name
  • Grant Purpose: Is it for minorities, STEM, simply income based? This will help you remember what you actually applied for.
  • URL for application: Whether you need to revisit the site later or you have not yet filled out the application, keeping up with the website to apply on is a wise move. And, if you are going to reapply the following year, you already have the information on where to do so.
  • Status: Have you applied yet? Are you awaiting results? Have you been approved?
  • Date of Application: It is important to remember when you applied. Many times, an application will tell you about how long it takes to receive results. Keeping up with your application date will let you know how much longer it should take or if you should reach out to someone because it is taking too long.
  • Approval Amount: If you are approved, type the amount into this box. This will help you keep up with how much of your college costs are currently covered and how much farther you have to go.

This spreadsheet can make the application process a little smoother. You can pull it up again next year when it is time to start applying for grants, too. You might also use it to keep up with information on grants that you do not yet qualify for but will in the future. It is a lot easier to make note of that information now than to try to remember where you found it next year.


After you have exhausted all other possibilities, you may still need to consider student loans. If this is the case, be sure that you shop around for the best ones. Different student loans have different terms and interest rates, so you need to research what you are getting. You can rely on Loanry to help you with this.

Additionally, keep in mind that student loans are not the only way to pay for school. Compare the rates and terms to personal loans as well. You might find one that is more affordable and that you can pay off much easier. You do not want to end up as another student loan debt statistic, so you should do all that you can to minimize student debt or avoid it altogether.

How to Avoid Defaulting On Student Loans: Money 101

Man counting college savings fund, tuition fee or student loan with calculator

Although getting a college education puts you ahead in your career, it’s also a huge expense. These days, many young American students are relying on student loans to cover their expenses as they pursue their education. This can, unfortunately, add stress over financial issues to the many other challenges of succeeding in university studies.

It has never been more important for university students to plan financial matters carefully. Defaulting on student loans or experiencing another financial setback is a bad way to start things out. Young people graduating from college need to build their credit rather than damage it.

Fortunately, there are many things students can do to avoid defaulting on student loans. As a student, you should do your research. You can get off to the right start in life financially and keep up with your student loans. Being aware of your resources and making effective plans is all it takes.

Default On a Student Loan: Learn how to Dodge This Unpleasant Status

Defaulting on student loans will damage your credit significantly. Damaged credit can make a lot of things in life harder for you. Once you finish your studies, you’ll be looking for a job. Many employers will check your credit before hiring you. Defaulting on student loans could make it more difficult to find a good job.

Poor credit also makes it more difficult to acquire housing. Landlords routinely check the credit of prospective tenants. Damaged credit could mean you have to pay more for lower quality housing. Damaged credit means you’ll pay more for any kind of loan you need. If you need a loan to purchase a vehicle, you’ll pay more in interest. You may not even be approved for a loan with enough credit damage.

All these factors make it very important to avoid defaulting on student loans.

Clearly, you need to do everything you can to avoid a student loan default. Use any tip or tactic available to you that helps keep up with payments. Be specific when thinking about how you’re going to manage my student loan. Again, planning is essential.

Below are four tips to use to make sure your student loan stays in good standing.

Be Organized

The Simple organization can help you to avoid defaulting on student loans. It’s easy to overlook payments or even default when you’re not staying on top of finances. Organize by calculating your budget each month. Track your spending. Work to build up savings. Also, set reminders for yourself of not only your student loan payment but all your financial responsibilities.

Use Available Resources

To avoid defaulting on student loans, use your resources. There are many resources out there helping students to manage their finances. Resources could be available from your university or your bank. They could include financial counseling services. They also could include budgeting apps. Always be on the lookout for programs you can take advantage of. In particular, consider programs like scholarships you could be eligible for. These programs could help foot the bill regarding your education.

Be Frugal While Studying and Afterward

A lot of young people get into the bad habit of overspending during college. Just because you have loan funds available to you doesn’t mean you should spend them. Try to save as much of your leftover loan funds as possible. Be frugal by avoiding eating out and spending money on luxuries like expensive clothing as a college student.

The best tactic is to be patient about spending money. Once you’ve landed a great job, you’ll have the money to enjoy yourself. For the moment, your priority is not defaulting on student loans.

Focus on Generating Income

The more money you make, the less likely you’ll be defaulting on student loans. You need to take advantage of income-generating opportunities. Once you start looking for a job after graduating, it’s good to take some small income-generating job until you land your dream job.

It could take months to land a job in your field. Try to avoid going without any paycheck coming in whatsoever. Once you graduate or leave school, you’ll be expected to start repaying your loans quickly. Don’t waste any time in earning money.

Types of Student Loans

Questions Before you get a student loanBeing familiar with different loans helps you to choose the right type to borrow. There are numerous loan types available. Some loans are more affordable regarding interest costs than others. One of the number one things you should learn while researching and planning are what types of student loans there are.

The following are two of the main student loan types available:

Federal Loans

By far, federal loans are the most commonly used student loans. These loans are ideal because they don’t typically require a credit check. Most college students don’t yet have extensive credit histories. This means that federal loans are often all that’s available to them. There are numerous types of federal loans including direct subsidized loans, direct unsubsidized loans, and Direct PLUS loans.

Direct subsidized loans are the best available option. These loans don’t require any payments until the student leaves school. They also don’t accrue interest that the borrower needs to pay until the student leaves school. The government pays any interest that accumulates before the student graduates.

Direct PLUS loans are a type of federal loan that is only available to students of graduate and professional schools. These loans do require credit inquiries.

Private Loans

Private loans come from private financial institutions. They could be provided by banks or credit unions. In some cases, private loans are also available from state agencies.

Private loans to be used for tuition and university costs are much like other private loans. They require credit checks on applicants. However, students can often be approved with the help of a cosigner. Interest rates can vary widely regarding these loans. Private loans should only be used by students if there are no other options.

Building Credit

One of the biggest reasons to avoid defaulting on student loans is to build credit. If you borrow a student loan and pay it off on time, it will benefit your credit significantly. Students often need credit-building opportunities. They often don’t have established credit histories.

While having a student loan creates an expense, it also creates an opportunity. These loans create opportunities to build credit. Strong credit is a huge asset in life. Therefore, students should focus on building credit and exploit opportunities they have to do so. Those with no credit history often struggle to build credit because they can’t get approved. However, federal student loans create an opportunity for loan approval regardless of credit history.

Unfortunate Consequences of Repayment Problems

Paying off student loans on top has positive credit effects. Failing to do so can be detrimental to a student’s credit. Defaulting on student loans isn’t the only student loan issue negatively impacting credit. The following are two other student loan issues that damage credit:

Late Payments

Any time you make a late payment on your student loan, it negatively impacts your credit. This is why it’s essential to make your loan repayment a priority. Leave yourself reminders so that you don’t make payments even a day late. Consider setting alarms on your phone so you remember when your loan payment day is each month. Don’t underestimate the damage one late payment can do.

One of the best ways to be sure you won’t make late payments is to schedule automatic payments. Automatic payments automatically come out of your account when they’re due. This is a great way to prevent late payments. Some private lenders might even give you a discount if you schedule automatic payments.


Of course, the most severe credit consequences come when you default. Defaulting on student loans can set you back years when it comes to building credit. It will take you a long time to repair the damage done by default.

As part of your student loan planner, it’s a good idea to put thought into ways to avoid default. This means you should brainstorm solutions for making your payment when you’re struggling financially. Possible options could include borrowing from a friend or selling a valuable asset.

Debt Consolidation

You may have numerous loans you took out for student expenses. If so, you might want to consider consolidation. When you consolidate, you turn several payments into one. This is great for organizing your debt.

Debt consolidation makes it easier to avoid missing payments. It’s complicated to remember numerous payments on different days of the month. Complete debt consolidation means one easy payment each month.

However, be careful when you consolidate. Make sure you don’t consolidate unless you get an interest rate that’s as low or lower than previous interest rates.

Minimizing Student Loan Costs

Of course, you’re less likely to experience defaulting on student loans if you owe less money. Anything you can do to minimize student loan debt can prevent defaults. You can control the amount you spend on your debt. There are numerous things you can do to owe less once you leave school. Here are some helpful tactics for minimizing student loan costs:

Going to a Less Expensive School

If you’re concerned about the debt before beginning college, consider applying to less expensive schools. The less your tuition costs, the less you’ll have to borrow. Explore your options. Public schools cost much less than private schools. You can also consider taking some courses at a community college to really bring costs down.

Avoiding Capitalized Interest

A loan with capitalized interest is a loan that accrues interest even before repayment starts. Then, the accrued interest is capitalized onto the loan. You will then be charged interest on both the balance and the capitalized interest portion of the loan.

Capitalized interest increases the costs of a loan significantly. When evaluating student loans, look for loans that won’t accrue interest until you graduate. Usually, federal student loans won’t capitalize on interest until the student graduates. If your only choice is to take out a loan that accrues interest beforehand, try to pay the interest off as it accrues if possible. This will minimize the amount of interest you pay.

Keeping up With FAFSA Changes

How accurately you fill out your FAFSA could influence the total costs of borrowing. This makes it important to be aware of FAFSA changes. The FAFSA is frequently updated so that it’s not exactly the same from year to year.

Changes frequently come out regarding the FAFSA deadline. Missing the FAFSA deadline could create a huge problem. Also, students should know that they need to enter income information every year. Students need to carefully follow instructions on the FAFSA website to stay updated on FAFSA procedures.

Taking Advantage of Tax Deductions

When it comes to saving money regarding student loans, tax deductions are important. Those paying off student loans can use loan payments as tax deductions. This helps minimize their tax liability. However, only interest payments can be deducted. Also, only amounts up to $2,500 can be deducted. Interest paid on both federal and private loans can be deducted.

Refinancing for Lower Rates

As your credit improves, your ability to get a better interest rate on debt improves. You can potentially refinance your student loans to save money on interest costs. When you refinance, you borrow money again at a better interest rate. You use the money to pay off your previous debt. Then, you start repaying the new loan. Refinancing can not only reduce interest but also bring down your monthly payment. This can make it easier to budget for your student loan payment. This then reduces your chances of defaulting on student loans.

Taking Advantage of Loan Forgiveness Options

If you’re struggling to keep up with your loan repayment, loan forgiveness option could be your choice. There are some loan forgiveness programs available that you may qualify for. Loan forgiveness programs could take away all or part of your remaining student loan debt.

However, it’s important to realize that these programs aren’t usually available right away. You need to pay on your loan for some time before you are eligible for student loan forgiveness. You may be eligible for these programs based on your job. Two loan forgiveness options are public service loan forgiveness and teacher loan forgiveness. There are also additional loan forgiveness programs in existence for those looking in other fields like health care and law.

You can learn more about loan forgiveness programs at If you visit this site, you can learn more about your student loan debt and your chances of qualifying for loan forgiveness.

Public Service Loan Forgiveness (PSLF)

You may be eligible for this loan forgiveness program if you are working in public service. This PSLF program could potentially get rid of all of your remaining student loan debt. However, you cannot qualify until you have to pay off your loans for 10 years.

Teacher Loan Forgiveness

Teachers could qualify for the teacher loan forgiveness program. However, teachers have to work for a school that qualifies for the program. They also need to have been working in the job for at least five years.

If you qualify for this program as a teacher, you could be granted as much as $17,500 in loan forgiveness.

In Conclusion

You now have a great deal of information available to avoid defaulting on student loans. Start planning carefully today. Once you get behind on payments, it can be difficult to catch up again. Be vigilant and work hard and you can stay ahead regarding your loan payments.

It takes an effort to establish strong financial health. Although accomplishing a university degree is a challenge intellectually and financially, it’s completely doable. It just takes focus and continued vigilance. Avoid the temptations to spend money. Also, be constantly aware of your debt load as you proceed in your studies. That debt isn’t going anywhere until you pay it off. Make avoiding defaulting on student loans your priority.

Once you’ve paid off your student loans, you’ll benefit from a strong positive mark on your credit report. This will make life easier for you whether you’re looking for a new job or a place to live. It will also relieve your stress and provide you with financial resources to take advantage of opportunities. Be sure you won’t be defaulting on student loans by putting this essential information to good use.

Loan Shopping

If you’re on the lookout for a loan, we have some options for you. But in order to find the best lenders and best deals for you, we need a bit more information.

What Student Loan Forgiveness Options are Available?

A few days ago, I received a notice in the mail that my student loan payments are coming due. I had been dreading the payments for years, but I was honestly shocked at the amount of my monthly payments: $1153.35. Who has that kind of money left over each month? Not me. I do not mind paying what I owe, but good grief, that is more than I can handle at once. I am on a mission to figure out another way, and I want to share my research with others in my predicament. We are going to take a look at ways to prevent needing student loans, student loan forgiveness, and alternative repayment options.

What Happens If I Do Not Pay?

Before we look at student loan forgiveness and repayment alternatives, let’s be clear on how non-payment of loans can hurt you. It goes beyond showing up on your credit score. These are federal loans we are talking about. The federal government has the power to get their money back in any way they can. This means that if you do not pay, they can garnish your wages- something most people cannot afford. They can also keep any tax refund payments you are should receive. It just is not worth the risk. Instead, put in the work to get one of the following options working for you.

Loan Forgiveness Programs

You hear about student loan forgiveness programs all the time, but it really is not what you think it is. In fact, if you call most of those places that offer loan forgiveness, they are actually loan consolidation places that want you to pay them to consolidate your loans. The only way to get any kind of student loan forgiveness is through the federal government’s approval, but it is not so easy.

Most student loan forgiveness programs are only available after a set amount of years of payments- yes, years. For instance, some student loan forgiveness programs only apply after 20 or 25 years of on-time payments. If you are screaming, “But I can’t afford my loan payment,” it’s okay. In a moment, we will talk about getting those payments lowered until you qualify for forgiveness.

Before that, though, it is important to note that some degree programs are offered student loan forgiveness for other reasons. Here are some examples:

Public Service Loan Forgiveness (PSLF)

There is student loan forgiveness is for people who choose to work in public service jobs. It does not kick in immediately, though. You will still need to make 120 payments- that’s about 10 years. However, if you do this, you qualify for 100% forgiveness.

Резултат слика за public service loan forgiveness infographic

Teacher Loan Forgiveness

If you are a teacher and work at a qualifying school for a minimum of five consecutive years, you can receive anywhere from $5,000 to $17,500 in student loan forgiveness.

-You will also find student loan forgiveness programs available for doctors and other health care workers, lawyers, and possibly a few other careers if you work for qualifying companies.

How Do I Qualify?

By visiting, you will be in front of a wealth of information about student loan forgiveness and repayment plans. By filling out some information, you should receive a summary of what you can qualify for. This will also show you your student loan balance and let you control some parts of payments you make.

What Do I Do If I Do Not Qualify?

Even if you do not qualify for student loan forgiveness, you can likely qualify for much lower repayment plans. These include:

  • Income Based Repayment (IBR)
  • Pay as You Earn (PAYE)
  • Income Contingent Repayment (ICR)

Each of these can help lower your payment. Some people will even qualify for payments as low as $0 per month, but you have to recertify, usually once per year.

Student Loan Consolidation

If you do not qualify for student loan forgiveness, another option you have is student loan consolidation. You can shop around for a loan company that will offer a lower payment and lower interest rate. You will still be paying your payment every month, put it will only be one payment. And it should be way less than my $1153 payments, especially if you shop around enough. In fact, loan consolidation may give you a much longer repayment period. If there are no other options in your path, take a look into consolidating your loans.

Current Student Loans

Everybody Has Student Loans, So Why Should I Worry About Them?

If you have even been paying the slightest bit of attention to the news lately, you know about the national student debt crisis in America. The specifics? Approximately 43 million Americans owe student loans, and do not think that is only the broke folks. Even doctors who make excellent money work for years to pay off their debt.

Of the 43 million Americans that owe student loans, there is a total of about $1.5 TRILLION dollars of federal student loan debt- just federal. There is another $119 billion in private student loan debt. Is your head swirling yet? As sad as it is to see such numbers, I must admit- guiltily- that I am actually glad I am not the only one drowning in it.

Due to this immense amount of debt, it is easy to see that most people have student loans on their credit. At the same time, those same people still get credit elsewhere. It has become almost commonplace among many to think, “Well, if everyone has student debt, it can’t really hurt my credit that bad, can it?”

It actually can, but it does often get viewed a little different from other debt. Let’s be clear about how, though. If you go in to apply for a loan and you owe student loans, lenders do not view that debt as heavily as they do others- not usually, anyway. Yes, most people have student debt so it is not viewed quite as negatively.

However, if you default on your payments, it will be viewed in negative light. If you are not in default, your student loans say something such as, “Paid as agreed”, on your credit. So yes, they are a factor, but according to your credit, they are being taken care of. Once you default, it becomes a problem.

Additionally, for lenders who only look at your score, not the items on your credit, your student loans can hurt your debt to income ratio. The best thing you can do is make the payments on time as much as possible. If your payments, like mine, are way too high for you to pay, there are other options.

Understanding Student Loans

Now that you’ve found the information you came for, let’s go over the basics. Yes, student loan forgiveness is something we all think about. But for those of you that don’t yet have them, the next couple of sections are very important. So don’t skip them.

Most people sign for student loans with no real thought about it. They know it is a loan that helps them pay for college, but most people do not truly understand how they work. Since student loans are the norm, they just accept them and jump in head first. Let’s remedy that.

On the basic level, student loans are loans with which to pay tuition and other school and living expenses. They do have to be repaid with interest, but that interest is lower than most other loan types. With some, you owe nothing while you are in school. With others, you will have to pay interest while in school. There are also some that will require full payments while in school. We will break these all down in a moment.

There is no extra step you need to take to apply for student loans. When your desired school receives your FAFSA and the results, they will tell you how much aid you can get from which categories, including loans. If you choose to accept them, the school will send you the necessary paperwork to fill out.

Types of Student Loans

Резултат слика за private vs federal student loans infographic

There are two main types of student loans: federal and private. Private loans are much easier to understand, so let’s get those out of the way first.

Private Student Loans

These loans come from lenders not affiliated with the federal government, such as the college itself, a state organization, banks or credit unions, and in some rare cases, individual investors. Private student loans are similar to most other private loans. They usually require a credit check and often require a cosigner. Your payments often have to begin while you are in school. Also, the interest rates may be variable- they have gone up to 18%- and that interest may not be tax-deductible. While these can be very helpful to fill when you need just a little extra, they should be a last resort.

Federal Loans

Now for the more complicated loans. Federal loans are the most common type and come in different shapes and sizes, so to speak.

Stafford Loans

You have probably heard of Stafford Loans at some point. They are broken down into the following:

Direct Subsidized Loans

Direct subsidized loans are available to undergraduates only if there is a financial need. With these, nothing is due while you are in school because the government pays the interest. Additionally, they pay the interest during any times of deferment you may go through.

Direct Unsubsidized Loans

Direct unsubsidized loans are awarded to both undergraduates and graduates depending on the cost of attendance of the school and the amount of any other aid that you receive. With these, you pay the interest the entire time you are in school.

Direct PLUS Loans

These are available from the U.S. Department of Education to graduates and professional students. Direct PLUS Loans require a credit check and a favorable credit history.

Other things to know

For the most part, there is no need for a cosigner or a credit check- except for the PLUS loans. Typically, the interest rate stays the same until the loan is repaid. Also, the interest is tax-deductible. If you are making payments on your student loans, you will receive a 1098 e that you can file with your taxes.

Future Student Loan and Financial Aid Planning

Is There a Better Way to Pay for School?

If you are not yet in college, have not graduated, or are preparing to send your kids to school, you still have a chance to pay for tuition and other expenses. These are some:

Look for a Tuition Free School

Yes, they exist. They are not, on the other hand, very well advertised, so you will need to do some research. If you find one you are interested in, all of that hard work will pay off.

Pell Grants

Pell grants are available, but there is a cap on them. Usually, it is enough to cover two-year schools or programs, but that may vary depending on which one you choose. It is never a bad idea to at least start at a school where tuition covers the first couple of years. You can always move on later.


You likely know that some people get scholarships, but they are usually for sports, great grades, and music. That’s what we hear of the most, anyway. There are actually many other scholarships you can get for a wide range of things.


If you are gifted in writing, science, or a few other subjects, there are contests held through the year. Some prizes include scholarships while others include cash prizes, and those cash prizes can range from $50 to the thousands. Both the scholarships and the cash can help you out with college costs, so do an Internet search to see what is available in your field of interest.

Work Study

Work study is a federal program that helps students with the funding needed for college through part-time employment. This may or may not be ideal for you, but give your school a call to see what is available.

Pay As You Go

There is always the option to pay for your college one semester at a time. This would require some extra work, but it could help you walk away from graduation free from loans. Try picking up extra shifts at your job during the summer. Babysit, do yard work, tutor, or anything else you can on weekends. Even if you can only cover one semester your entire program, that can save you thousands in loan costs.

Tuition Reimbursement

There are employers that will reimburse your tuition costs after graduation, and some who will assist while you are in school. Talk to your current employer or do a search for other employers who provide this type of program to find out the ins and outs of their particular program.

Tax Credit

While you are in school, there are two different tax credits that you can apply for: the American Opportunity Tax Credit and the Lifetime Learning Credit. Apply for these credits and then use that credit money to go towards your college costs.


There are a lot of people who do not want to try it, but crowdfunding has become a big thing. You plead your case on platforms such as GoFundMe. Tell the crowd what you are trying to do and give them a good, compelling reason why. Often, at least a few people will try to help you out. Remember, anything you can raise in other ways means that it will not be coming out in loans.


Many organizations have learned to harness the power of fundraisers. There is no reason you cannot see doughnuts, too. Give it a try and see what you can do.

Military-based Funding

If you, your parent, or your spouse has served in the military, there is an aid for those who qualify. Your school can usually help you figure out what you qualify for and how to go about getting it.

Traditional Student Loan Versus An Income Share Agreement

Can I Cut the Amount of Loan I Need?

If you cannot get around needing a loan, there are ways to cut down on the amount you have to borrow. The following are just a few ideas, but talking to your financial aid assistant at school might help you come up with some of other ideas.

Attend Classes in the Summer

Summer classes are quite often much cheaper than other terms. If you can attend at least some classes during the summer, or other discounted times, you can save a lot. Check in with different schools to see who has terms that you can save on.

Pay for Living Expenses Yourself

When you are offered your financial assistance package from your school, there is usually assistance that is in addition to school costs. If you take out student loans, you will often be offered assistance with living expenses. Basically, you can get the maximum semester amount. After tuition is taken out, the remainder can go to you as a check or bank deposit that you can then use for basically anything.

As I have always attended online school, I have always used my additional amount to pay for my Internet or computer equipment. Some people use it to help with rent or monthly bills so that they do not have to work so much while also trying to attend school. I tend to regret accepting it. Yes, it helps at that time, but it also adds on to the amount I owe.

If you can afford to pay your own living expenses while in school, do that instead.  It comes down to priorities, really. Do you want the convenience now and the headache later, or do you want to work a little harder now and have less of a headache later?

Cut Down Material Expenses

My current college adds the materials fee onto the tuition, so I really have no choice this time. However, the school I went through for my Associate’s and Bachelor’s degrees let you be in charge of your own materials. You had the choice to just let them send the textbooks to you and add that into your tuition, but you could also order your own.

When I was a newbie, I just let them add it on to my tuition because I did not know any better. One day, though, I saw the prices of those texts: $175, $310, $279, and so on. Call me cheap if you want to but that was an awful lot of money to spend on a textbook I was probably never going to look at again after class. In fact, I can honestly say that after five years of school, there were only two books I referred back to which were Psychology and Finance, but that was only because I love those topics. I really could have found the information online.

You can get used textbooks, or even find them online for a lot cheaper. I quickly discovered two websites that offered even lower options: Textbook Rush and Knetbooks. I could find the textbooks that were costing me hundreds from for $10, $20, or $30- sometimes more and sometimes less. Even better, you could rent them instead of buying them or choose the digital version for cheaper.

Live Off Campus

Living and eating on campus will add to the cost tremendously. Try to live off campus instead. Find a couple of schoolmates to share a place with, pay your parents $100 a month to stay with them, or even rent a small place ten minutes from campus. Any of those will cut your costs down a lot. And, while I suggest eating at home as much as possible, even eating a burger at a nearby drive-thru is usually much cheaper than eating on campus.

Community College or Certificate Programs

I am about to lay down some truth here that will likely have my grandmother rolling over in her grave and some parents wanting to take off my head, but I think I will risk it. I was told my whole life that you have to have a college degree to make it in life. From the moment I can remember, some family members told me that college was a life or death situation, and I was scared into believing that was true. Well, it’s not. It is not necessary. In fact, there are many people who did not attend any college that are making it through life much easier than those that have a college degree.

I learned too late that I should have considered other options. After receiving my Associate’s Degree in Business Administration, I thought that I could at least get my foot in the door somewhere. Instead, I was told I needed either a Bachelor’s Degree or experience. And, of course, that left me wondering how I was supposed to get experience if I could not get hired.

I made the choice to re-enter college for my Bachelor’s Degree, telling myself that this was it. This was the answer to my problem. I graduated and went out to put in applications and got more surprising news. The only thing I could get hired for was an entry level position paying $8 per hour. I wanted to scream. At this point, I was in all of this student loan debt so that I could make less than I was making waiting tables?

Still Not Enough

My school eventually helped me land a job as a manager at a local mattress store, but I was still only making a little over minimum wage. I let someone convince me that if I really wanted to make it, I needed a Master’s Degree. And I really just wanted to give my kids a good life, so I listened and entered a Master’s program for Project Management and hit the ground running. I thought everything was going great until I got smacked in the face with some irritating realizations.

First, I was the only manager at this chain of retailers that had a degree…period. I could have gotten that job without going to school at all. In fact, my hiring manager told me that my degree had nothing to do with why they hired me – it was just a bonus.

Second, the project manager at this company also had no degree and no project management training. I wanted to scream. I felt like I had just wasted the last five years of my lifetime I could have spent loving on my kids more and working towards a career I wanted instead of a degree. It was disheartening.

The Point

The point of my rant is to say that most career fields do not need a degree. Obviously, if you want to be a doctor, nurse, or a couple of other things, you need school and training, but I would definitely want to know what I was doing if someone’s life was in my hand anyway. There are other fields, though, that apparently require nothing but an application and a willingness to learn. This is actually exciting news for most people.

Before jumping into college, do some research to find out exactly what education you need to do what you want to do. It may be nothing. You might be able to do some self-studying at home and learn what you need to. Companies may just want a fresh face that they can hire and mold. It is better to check before spending thousands of dollars and hours of time on something that is not necessary.

Also, if you need some education, or you just feel that you would be more confident with it, consider a two-year community college or even a certificate program. Pell grants often completely cover community colleges. Most certificate programs are, too. There are plenty of options available that can get you training and get you to work faster, so explore all of your options.


Trying to repay your student loans can be stressful, especially when your payments are more than your monthly rent. Fortunately, there are options that can help borrowers pay back with more ease. Take some time to research options available to you and apply. Always keep loan consolidation on your mind in case no other options work out as you need them to.

What is the Impact of a Student Loan on Your Credit Score?

Having to pay back a student loan can be a real bummer and it’s a frustrating process, especially because of the student loan impact on credit score. But there can be an upside if you pay back the loans on time. In fact, regular payments can help your credit.

How Can a Student Loan Impact On Your Credit Score

There can be both a negative and positive student loan impact on credit score depending on your payment practices. A student loan typically has a long repayment period so the score will get a boost from a long credit history. Your payment history has a big impact on your score so if you make your payments on time every month, it helps build up your credit. However, if you do default on the loan or have late payments, it can hurt the score.

Positives of Student Loan Impact on Credit Score

Student loans are not impossible to deal with. There are some positives when it comes to a student loan impact on credit score. If you make at least the minimum payment and make those payments on time, you can build the score with a positive credit history.

Paying On Time Makes Up 35% of the Score

Payment history has a big student loan impact on credit score. Many things you make a payment on, such as car insurance and rent, aren’t usually reported to credit bureaus until you stop paying them.

Even though some payments aren’t reported to credit bureaus and don’t have a positive impact on your score, student loans do. The payments you make on your student loans can help you establish a good payment history. If you don’t have any other loans in your name then paying a student loan on time can help you start building credit from a younger age.

Easier to Build a Credit Mix

A credit mix doesn’t have as big of an impact on your credit score but it’s still important. A credit mix is the mixture of credit you have and this can include auto loans, credit cards, and mortgages. The more you have and the better variety, the better it will look on a credit report. If you already have a credit card then a student loan will help give you more credit mix.

Long Repayment Means Long Credit History

Another positive student loan impact on credit score is the following. The length of your credit history will influence about 15% of the score. Since student loans usually come with 10-year repayment plans, having a student loan can help you build a long credit history. If you do have the opportunity to pay off your loans faster, you should still take it since there’s no reason to stay in debt for longer.

Negatives of Student Loan Impact on Credit Score

If you aren’t properly handling your repayments then student loans can wreak havoc on your credit score and you can get a negative student loan impact on credit score.

Paying Late

Since paying on time has a good impact on the score, paying late will have the opposite effect. In fact, paying late can be the most negative student loan impact on credit score. Getting behind on paying your loan will hurt your score as well as your credit history. Bad marks can stay on the report for seven years. Your student loan servicers can report the delinquency as early as 30 days after payment is due so don’t think you can just skip a month and it won’t have an impact. If you can’t afford to make your student loan payments, you may qualify for an income-driven repayment plan if you have federal loans. If you have private loans, you may be able to refinance for a lower monthly payment.

Defaulting Greatly Damages Score

Another negative student loan impact on credit score is an account in collections. This is even worse than a late payment. Accounts in the collection will stay on your credit score for seven years, just like late payments. These accounts stay on your credit report even after you pay them off. Creditors don’t want to lend you money unless you can be trusted to pay it back and defaulting will show creditors you can’t be trusted. Defaulting on student loans means that it can be harder to get credit for other things in the future. If you are worried that you may default, look at the options for refinancing and repayment plans.

Types of Student Loans

There are different types of loans for students. No matter which one you choose, the student loan impact on credit score will be similar.

Private Loan

Private loan can be hard to get if you don’t have a good credit score or someone with a good credit score who can co-sign your loan. A private lender will run a credit check to decide if you qualify. If your credit score passes but is still low then you will likely have to pay more in interest. A private student loan impact on credit score can be possible if you qualify.

Federal Loan

You may not have a credit score when you are just starting out in life and a fed student loan can be a good option. You can get a federal loan without a credit check and it can have a positive student loan impact on credit score.

Personal Loans for Students

higher education loan can be hard to pay back and you want to make sure your payments are on time so you don’t run into any trouble with your credit. Getting a well-paying job can be a good start to paying back loans but it’s not always a feasible option.

While it’s not always recommended to go into more debt, there can be more comfortable ways to pay back a loan besides just qualifying for a government repayment plan. This is where student personal installment loans come in as a way to give you more breathing room.

A personal loan can be helpful to students who are drowning in debt and aren’t able to make ends meet. Students don’t have that many lending options that are available to help them get out of debt. Credit cards can only make the matter worse and it can be frustrating to keep borrowing from friends and family. A personal loan for students can come with a lower interest rate that is more manageable. The lower rate can help you invest money in other projects that can help your income grow.

If you have already gotten into some bad borrowing habits and your credit is not that great then you can still get a personal loan for students. Some lenders may offer slightly higher interest rates if your credit isn’t that great and others will shorten the amount of time you need to repay the loan. Personal loans can be processed quickly, allowing you to have that money that you need. Personal loans don’t need any collateral, which makes them easier for students to get since the chances are likely students don’t have a lot to borrow against.

Here are some options for you, just put in your information, and you may get suggestions about a potential lender for you:

Should You Do Debt Consolidation for Student Loans?

A personal loan will allow you to do debt consolidation. This process allows you to take your accumulated debts and make one payment with hopefully a lower interest rate. It can help to start getting your debt under control after graduation and when payments for student loans begin.

Since you already know about the student loan impact on credit score, does debt consolidation also hurt your credit score? Determining if debt consolidation can hurt your credit score will depend on the different options you choose. When you first are selecting a loan for debt consolidation, you are applying for new credit, which means a hard inquiry on your credit report. Any time you do have a hard inquiry, your credit score can suffer.

While it initially seems that getting a loan for debt consolidation can hurt your credit score, adding new credit or a new loan can cause your utilization ratio to go up and this can actually help your score. However, for this to work, you need to not be acquiring any new debt.

If your credit score is already in bad shape

In this specific case debt consolidation won’t really matter. If you don’t want the debt consolidation process to hurt your credit then you will need to consider all your options. The higher the amount of debt, the greater the impacts on the credit score. Even if you do see a slip in your credit score, the chances are the score is low enough that it doesn’t make much of an impact. Since a big part of your credit score is your payment history it’s still important to make payments on time every month, including your new loan for debt consolidation.

For debt consolidation to help with your student loans, the key is to not be taking on other debt. If you are running up credit card bills and getting into more debt then you could be in worse shape than before. You will need to think about your own individual situation so you know if the process can help you and your specific debt.

Is There Help for Student Loans?

Chances are if you are applying for college and are looking at how to afford it then you have heard of FAFSA. This stands for Free Application for Federal Student Aid. If you want to be considered for financial aid or even have a work-study job during your college years then you will need to fill out this form. The form will take your income and your family’s income into consideration. It will then determine your aid eligibility for loans or grants. Grants are financial aid you want since they won’t need to be repaid.

Even if you think your family earns enough money to prohibit you from qualifying for aid, it is still a good idea to complete the form. The form is needed if you are going to receive any scholarships and will also be needed if you want access to federal student loans. Even if you do have to take out student loans, and many people do, it helps to have the most options for paying for college. If you don’t fill out the form, you can miss out on student loans and scholarships, which you may have been eligible to receive.

There were two changes for the 2017 to 2018 school year. You are now encouraged to submit the form earlier. There is also a renewal option to complete the form that allows you to automatically transfer over data from year to year so you don’t have to start over each time you apply. You will need to upload your income data every year you are in school. The deadlines do matter so it’s important that you check deadlines at schools you are considering.

Understanding the 5Cs of Credit

Getting a loan approval can be dependent on your credit score but the credit score is only a portion of the decision on whether or not you are rejected or approved. Anything that can show the lenders whether you can repay will have an impact. A single item doesn’t determine your credit. Instead, it’s an equation with multiple factors that speak to the possibility and ability to repay the loan. These factors can be referred to as the five C’s of credit.

Credit Score Increase


A person’s character can lead to decisions one makes, such as loaning money. Character is based on credit history. Your character is determined by your known financial actions. There is no way to see into the future about how your character can be so creditors go on past action.


A character can be judged more subjectively but capacity is straightforward. It’s the ability to repay. Lenders will look at income capacity to see whether or not you can repay the loan. If the outgoing money is more than your current income then you don’t have the capacity to pay the loan.


When you apply for a mortgage, a lender will want you to pay for a portion upfront. This can be low or it can be as high as the lender wants. This is also true with car loans. When you make a down payment, this is considered capital and it shows that you are serious about the purchase. You have some skin in the game and are invested in so you are more likely to pay off the loan and not lose your investment.


Collateral is slightly different than capital. In the loan world, this can be a check, piece of land, car title, or something else the lender sees as valuable enough to regain the money. Collateral can improve your chances of getting approved. Collateral is less of a financial risk for the lender.


Conditions are the conditions surrounding the loan. This can seem straightforward but there are conditions that can affect approval. A lender has to consider all conditions. Things like the interest rate and terms of the loan will also need to be factored in.

Establishing a Credit History

A student loan can have an impact on credit score, but what do you do if you are trying to establish credit history? Students and young adults often have this problem and it seems unfair that you have to have a good credit rating in order to pay for something as important as education. Credit isn’t just about credit cards anymore and there are ways to establish a credit history even if you don’t already have one.

Get a Credit Builder Loan

This is one of the easiest and painless ways so establish a credit history. This type of loan is one where you borrow a specific amount of money. The bank or credit union holds the money in an account you don’t have access to and you make monthly payments. When the amount is paid off you get the money minus any interest you needed to pay.

Many credit builder loans will be between $300 and $1000. It’s not about how much you can borrow but instead how much you can repay every month. You will need to be sure you can afford monthly payments before you begin the process. Otherwise, you can do damage to your credit score.

Does a Credit Builder Loan Really Work? Loan Up!

Build Credit with Parents’ Help

Your parents will likely have a credit card. You can ask to be an authorized user of your parent’s credit card. This means you won’t have a card of your own but can use theirs. You do need to check with the credit card company to see if they report any authorized users’ payments to them. If they don’t then this won’t work. Make payments on time each month. If you don’t, not only are you hurting your credit history but also your parents’. The biggest advantage of being an authorized user is that their credit history will also make yours look good. You don’t even really need to use the card.

Paying Your Bills

Some think that utilities, insurance, and rent are reported to credit bureaus. This is only true if you don’t pay. However, it’s still important to pay your bills in a timely manner. If you want credit bureaus to be notified of on-time payments then a third party reporting agency can be an option. You may have to pay for this service. But it can be worth it if you are trying to build up a credit history and do make all your payments on time.

Buying a Car

The first thing that many young adults buy is a car. If you make the monthly payments on time, you can establish credit history.

Student Loans

Almost nine of ten students get an education with the help of student loans. Depending on the loan, you may have a grace period before you have to begin making payments. Be sure to pay them on time every single month. There are different lending options for student loans and you may not have to go through Sallie Mae. Fees and rates can vary depending on different methods.

Build Credit with a Co-Signer

If you have someone in your life with good credit you can ask them to co-sign a personal loan in order to build credit history. The payments you make on the loan will then be reported to the credit bureau so you can establish credit. It’s important that you don’t default on the loan since your co-signer will then be responsible for paying it and both your credit scores will be negatively affected.

How to Get A Personal Loan with a Co-signer

Store Cards

Stores will offer customers brand credit cards. If you spend a lot of money at these stores then chances are you can also be pretty good at paying your monthly credit card bill. The best way to handle a store card is to buy with it only what you would have bought with cash and pay the entire balance off each month.

Secured Cards

No one will get a credit card before there is established credit history but you may be able to get a secured card. This is when you put between $200 and $300 in the bank and let it sit there for about a year. The credit union or bank can see this as collateral for a secured credit card. You aren’t able to make large purchases with a secured card. But when you make the payments on time each month, the credit union or bank may give you an unsecured credit card in a couple of years. Secured cards aren’t meant to be used long term and the purpose is to build or rebuild credit.

How to Increase Your Credit Score

Using student loans to your advantage and allowing the student loan impact on credit score to be positive can help you increase your credit score. There are also other ways to improve your credit score.

Credit Score Factors

As it has been said time and time again, it’s extremely important to avoid late payments since this makes up such a big chunk of the credit score. If you aren’t able to remember your payments then sign up for automatic payments. If you can’t afford your payments then there are options you can consider, including debt consolidation.

Start paying down revolving debt first. Revolving debt includes credit cards. You want to keep credit card balances as low as possible and ideally at zero. Not only does this help with your credit but it also helps you avoid hefty interest fees. Pay off your debts to keep your credit utilization in check.

Since items like paying rent and other bills don’t help your credit score unless you are late, ask your landlord if you are able to pay for your rent on a credit card. Use the money that you would typically spend on rent and pay down the balance every month.

Be sure to review your credit report and check for any errors. Every year, you are entitled to one free credit report. Don’t miss this opportunity to check your score. Errors can be common and can be costly to your credit score. Review reports every year and then dispute anything that isn’t right.

When you are shopping for a loan… 

When you are shopping for personal loans for debt consolidation, it’s important to rate shop and get the lowest interest rate possible. If you rate shop carefully then you can make sure it won’t damage your credit score.

The best way to do this is by keeping your loan applications within a 14-day time frame. This way credit reporting bureaus will understand you are loan shopping and it won’t damage your score.

Be sure to take care of any debt in collections. If a debt is in collections this doesn’t mean you don’t have to pay it off. Any account in collections can be very damaging to your credit score. An account in collections can stay on your credit report for seven years. Take care of these accounts as soon as you can. When it’s paid off, ask them to send a letter saying the debt is paid off to the credit reporting bureaus. Be sure to be diligent about this so you can get the marks off your credit report as soon as possible.

What Is a Travel Loan for Students?

For students who are looking to travel or spend a semester or year abroad studying a different culture, there are options instead of just taking on more student loans. Travel loans for students are just personal loans for students to pay for travel. These are separate from a federal student loans or private student loans. There can be plenty of reasons why a student wants to travel and it’s not just to study aboard.

Some students may also want to dedicate time to volunteer work or mission trips. Others may want to visit family during the holidays. Other students may also want to travel just for the experience before they settle down with a typical corporate job. Regardless of the reason, it helps to have the funds.

Travel loans for students can cover anything that is travel related, including plane tickets, luggage, food, lodging, and even souvenirs.

How Can You Use a Personal Loan for Travel?

 There are Pros and Cons of Using a Travel Loan and These will Depend on the Individual

This is a loan so it will have to be repaid and some may find it challenging to pay this loan back in addition to student loans they already have. As a young adult, debt can affect your future, depending on how you handle it. Just like the student loan impact on credit score, if you don’t pay back your student travel loan it can mess up your credit. As a young adult, you may have not had enough time to build up credit so you don’t want to mess it up before it even begins.

Your credit may have an impact on whether or not an employer will hire you. You don’t want to work hard toward your degree and not be able to get the job you want after graduation. You also don’t want to stay in a cycle of debt. And, between credit cards and travel loans, it can be difficult to stay afloat. Poor credit can mean irresponsibility and a lack of stability. And companies want people in certain positions that are responsible so this is why your credit score can affect your job opportunities.

Well financed student travel can also be a good way to establish credit

Especially if you make payments on time just like student loan impact on credit, it helps your overall credit score. Good credit can help you get a job and can help you purchase a home in the future. If you have the ability to repay the loan and can be committed to doing so then a student travel loan can be a great idea. However, if you feel that you may not be able to repay it then you may not be able to move forward with your plans.

Final Thoughts

When asking what is the student loan impact on credit score on my student loan, it helps to remember your specific situation. If you can pay your monthly payment on time and establish a good payment history then you can have a positive student loan impact on credit score. However, it’s easy to start having a negative student loan impact on credit score if you aren’t careful about making payments. For those having trouble making payments, debt consolidation can provide some relief.

There are ways to establish your credit for those who are just starting out. And ways to improve your credit score in the future. For students who want to travel, instead of taking out more student loans consider a travel loan for students.