How Applying for a Student Loan Feels Different These Days

Mini graduation cap on rolled up cash.

Parents and students will agree that there’s an increased sense of uncertainty today when it comes to pursuing higher education plans. With life practically upended as we know it, many things are left high up in the air and have yet to fall back down into their proper place.
Even those who have set aside college funds for their children might now be dealing with unemployment, and so now must seriously look into available higher education loan opportunities.

Regardless of the dire changes in the world’s situation today, what hasn’t changed is the importance of investing in education. This is why many will most likely still pursue it. Although, they might have to delay it for a time until things settle down a bit. Different kinds of financial aid, from scholarships to loans, can be sought out to help students increase their chances of securing funds to secure their educational future.

It will require patience and a keen understanding of how these options work, though. After all, taking out a loan for school is one of the first, and biggest, loans you’ll ever take out for yourself. As a matter of fact, the only other type of debt that comes close to the average person is the housing loan.

As with any other types of loans, there’s going to be a stringent application process you’ll need to get through first before approval. To apply for a student loan, forms will need to be filled up, and requirements will need to be sent. In other words, there’s a lot of information gathering and data collecting that will occur.

Student Loans Then and Now

Before diving into those specifics, let’s first take a look at what you can expect in today’s student loan landscape. Perhaps the first thing you need to know about student loans is that you’re not the only one interested in applying for it. As a matter of fact, there are over $1.64 trillion worth of student loan debt in 2019, $1.515 trillion of which come in the form of federal loans, while the other $124.65 billion comes from private funding, according to the December 2019 data from the Department of Education.

These numbers are staggering. And give you an idea of just how much clamor there is for it in the country. And these numbers keep growing every year.

student loan debt statisticWe were still only dealing with billions back then, and now it’s in trillions. It only took a full decade to double that amount in billions to trillions today! Can you imagine how much more it’s going to be in the next decade?

The Rise in Student Loans

As more people seek out higher education, whether in college or post-graduate studies, the more that student loan opportunities—and rates—go higher. There are a variety of reasons for this.

One is that the cost of schooling itself increases every year. Colleges and universities may justify these tuition fee increases with improvements in faculty, facilities, and curriculum. Of course, they would want to reassure you that you’ll be getting your money’s worth if you do decide to come to their institution.

student loan quote

Another thing you should know before you apply for a student loan is that you can expect an average of $35,397 student loans per person. So if you’re planning to take out a loan, it would be great if you could also have a reasonable expectation of where you’re going to get funding to repay the loan. After all, student loans aren’t simply offered on principal amount; there are interests and possibly other add-on rates that may be attached to it.

Simply put, it’s definitely a long-term commitment that you would do very well to prepare well for and take seriously.

Understandably, the idea of taking out a student loan today, especially in this very uncertain economic climate, is nerve-wracking. However, from then and now, student loans have proven to be a reliable option to help you pursue your life goals by way of completing your education.

Taking out student loans is a serious responsibility, yes. But with proper management, it is possible to prevent it from overwhelming your life or drowning you in debt for many years to come.

Here are some of the first steps and considerations you need to take if you are planning to apply for a student loan.

Set A Budget

How can you set a budget when you don’t know how much loan amount will be offered to you? The answer is simple: list down your options for colleges and universities and sees how much they cost. Doing this should give you an idea of the range of costs you should aim for when you take out a loan.

The cost of tuition will depend on how prestigious and exclusive the institution is. Ivy league schools are definitely going to require a lot more in terms of finances. Smaller private institutions, like art universities, also tend to be in the higher range of tuition costs because of the perception of exclusivity attached to it.

Other more “regular” colleges and universities may cost a little less. But don’t take it to mean that it’s going to be so much more affordable. Whichever option you take, it’s still going to cost a serious amount of money. You’re talking about funding for your entire four years (at the minimum!) of your degree, after all.

This is also why it’s crucial for you to think very hard about what course you’re pursuing before you apply for a student loan. Is this something that you could build and grow into as a serious career, or is this something more of an interest elevated to a higher level? How marketable are the skills that you can have in this degree you want to earn? What is the job market like upon your graduation? Does your area of study allow you to pivot to a different career path seamlessly in case you need to?

Make a Good Plan

We know, it’s definitely a lot to think about. But you have, because remember, once you take out the loan, it’s your responsibility to pay it back. Therefore, whatever it is that you’re using it for, you should at least try and make sure that your next steps in the future, upon graduation, are going to be helpful to you in bearing this responsibility.

As you’ve seen in today’s world, there is no guarantee for success, that much is true. But also, preparation really is key to make your future just a little bit more secured. So you don’t let financial obligations like student loans take over your life. At the very least, you can try.

It is highly advisable that in your search for the best-suited loan offer for your needs, you prepare the basic document requirements as well. You might also want to make duplicates of these documents, especially if you intend to make multiple applications.

Approaching Student Loans

Student loans can be terribly intimidating, we know that as much. The sheer amount of money involved in the conversation is enough to send a first-time student loaner tossing and turning at night.

When taking steps to apply for student loans, regardless if it’s your first time or not, it’s always good to take a comprehensive look at what awaits you in the deal. Know what are the moving parts in taking out a student loan.

requirements for a student loan

As a tip, don’t be lured in by easy promises of huge money to fund your education. Always read the fine print and make sure you’ve studied the terms and conditions before signing on the dotted line. If the process seems too easy and too good to be true, then that’s probably because it is.

That’s why you should really take the time to study your options and compare the different offers out there. If there’s one major change you can be grateful for a decade ago, it’s that information and fact-checking is a lot easier now, thanks to the internet. Put in the work for research so you can come up with a well-informed decision. Your future literally depends on it.

Types of Loans

types of student loans

What you have to remember about federal loans, however, is that the school will be the one to determine how much you should get. That, plus the fact that there is a cap on how much you can loan. Whether you get subsidized or unsubsidized loans.

types of student loans

They will do a hard check on your credit history to verify your eligibility. And again might need to require a co-signer. You must clearly identify who the primary lender will be. In this case: is it going to be or your parents?

Private loans also do offer a variety of options for loan repayment. Do you think you can manage a monthly schedule? Which will start running as soon as the funds are released to your account. Or would you rather defer the payments until after you’ve graduated? Each choice will have its pros and cons so make sure to think about it hard.

When you apply for private loans, you’ll also be the one to identify first how much you think you’ll need. You can justify your application by saying it’s for student loan housing on top of tuition and other additional costs. The lender will determine if your justification is good enough. And most importantly, if your credit standing is good enough to give the amount you asked for. Be prepared to be offered a different amount, and one that’s less than what you’re hoping to get.

When you apply for a student loan, the most important thing you have to watch out for in private loans is the interest rates. They tend to give out the highest interest rates among the different types of loans you can avail of in this list.

Final Thoughts

Ultimately, however, while there may have been many changes in the landscape of student loans in the past decade, what remains is the fact that it is a crucial part of pursuing your dreams.

True, there are many reasons to be scared and unsure in these times. But there are also plenty of helpful resources you can use to help you feel in better control of your future. Before you apply for a student loan, study your personal loan options. Take a deep look at the considerations, and base your decision on established data and factual information. Then you’ll find taking out a student loan today does not need to be as scary as you think it is.

We Did The Homework on the Top 7 Student Loan Lenders

Graduating from high school and choosing a college or university to attend is an exciting time. There are a bunch of celebrations, from the graduation ceremony to your personal graduation party, where you get to celebrate with your friends and family. Even getting everything you need for your new dorm room can be exciting, even if you are nervous about moving away from home for the first time and living in a dorm room with a stranger. But in the midst of all of the excitement, it is important to look at the reality.

College tuition fees are very high, and they are increasing almost every year. Over the last decade, public universities have seen a jump in tuition prices of 35%. Unless your parents can afford to outright pay for your college tuition fees, then you may have to consider a higher education loan from student loan lenders for assistance.

What You Need to Know About Student Loans

Before just searching for student loan lenders online, it is important to know some basics and statistics about student loans, so that you have a better idea of what you are dealing with.  Once you know how much you really need to borrow, you will be ready to learn how to sift through all of the student loan lenders online to find the best student loan lender for you. Even when you have to borrow money to pay for school, there are some ways to save money on your student loans. If you keep these tips in mind, then you could save yourself some money in the long term.

First of all, if you are feeling nervous about finding and dealing with student loan lenders, take a deep breath and relax. You are not alone. In fact, if you are in this situation, then it just means that you fall into the 70% of American college students who require student loans as financial aid. That being said, this is still not a decision to be taken lightly. The average American owes $36,847 in student loan debt. Whether or not this is necessary for you to finance your education, you should make informed decisions when dealing with student loan lenders, as it will have a big impact on your financial future. In order to make informed decisions, you should take the time to learn about personal loans and types of student loans.

What You Need to Know About Finding Student Loan Lenders

Once you have exhausted your other resources, such as using your own savings and getting federal student aid, you still may need some additional support. At this point, it is time to consider finding student loan lenders. To make your search easier, you can use a student loan locator. When searching and deciding between student loan lenders, you should keep these tips in mind:

  • You can not choose your own student loan lender for federal student loans.
    On the other hand, if you are searching for private student loan lenders, then the decision is completely up to you. While this can spend some time and effort, it means that you can make an informed decision, based on the advice below, in order to get the best student loan lenders for you.
  • Compare fees and interest rates.
    The fees and interest rates can vary greatly between different student loan lenders, so it is important to compare the rates of multiple student loan lenders before making your decision. There are many possible fees to look out for, including origination fees, early payment fees, and even lender costs.
  • Check your credit score before searching for student loan lenders.
    Your credit score could have an impact on whether or not you are able to get a student loan and at what rates. By checking out what your credit score is before searching for and comparing student loan lenders, you can find out the possible impact of your credit score on your student loan options and give yourself a more realistic idea of what kind of rates to expect.

Top 7 Private Student Loan Lenders

Not all student loan lenders are equal. If you want to make sure you only consider more trustful student loan lenders, then check out our list of top 7 student loan lenders. At a minimum, you need to make sure your provider is legitimate and not a scam.

1. Citizens Bank

Citizens Bank offers both fixed-rate and variable-rate private student loans for both undergraduate and graduate education, and students or parents are eligible to either borrow or refinance loans through the bank. Loan terms are from between 5 and 15 years, and borrowers may take out between $1,000 and $350,000, depending on how much they qualify for. If you are eligible, you can save money by not paying for application, origination, or disbursement fees, and you can also get loyalty and autopay discounts. There is an option of either making regular or interest-only payments while in school, and co-signers may be released after 36 consecutive on-time payments. Citizens Bank has an A+ rating from the Better Business Bureau.

2. Sallie Mae

Sallie Mae is a popular choice for private student loans. With low fixed and variable rates for undergraduates, Sallie Mae also has no origination fees or pre-payment penalties. One reason Sallie Mae loans are popular is that borrowers enjoy the flexibility with repayment terms, and unlike most lenders, Sallie Mae allows part-time students to take out loans.  A student or parent can apply for a loan and get a result in about 15 minutes. Borrowers can take out enough funds to cover any expenses associated with school-certified expenses, such as tuition, books, meals, travel, and even a laptop. Sallie Mae also has specialized graduate loans, including ones for bar study, law school, and dental and medical residency. International students may take out a student loan with a qualified U.S. co-signer.

3. College Ave

Another lender with a simple application, College Ave allows qualified parents and students to take out loans for undergraduate and graduate studies, including refinancing options. While there are no application or origination fees, College Ave does charge late fees of either 5% of the payment or $25, whichever is less, for any payment not received within 15 days of the due date. There are no limits beyond the borrower’s own creditworthiness, and loans can range from between $1,000 to 100% of the school-associated expenses. Co-signers can get a release after 24 months of consecutive on-time payments, not counting forbearance or deferment periods. Any deferment or forbearance situation is decided case by case.

4. Discover

Borrowers using Discover may qualify for both current and future loans with the multi-year option, meaning they can focus on their studies instead of worrying about whether they will be able to find a good loan in the following years. The multi-year process is simple and does not have an adverse effect on your credit score, and as long as you stay at the same school and pass a credit review you will continue to qualify for the same rate. There are no application, origination, or late fees, and loan specialists are available at any time to help with questions or problems. One thing Discover offers that is very unusual is a cash reward for good grades, equal to 1% of the loan amount. Anyone who earns the reward only has to log in within 6 months and claim it.

5. Earnest

Earnest is a great lender because of their low rates and lack of fees. Repayment terms are flexible, the application is fast and easy, and you can get a quote in as little as two or three minutes. As a private lender, Earnest has some extra incentives, such as a 9-month grace period and the ability to choose to skip a payment once a year. During the grace period, interest will start to accumulate, so borrowers have the option of making payments on the interest before the repayment period starts.

The minimum loan is $1,000, but there is no upper limit as long as the borrower qualifies. Single borrowers have 5 to 7 years to pay back the loan, but borrowers with a co-signer have between 5 and 15 years to pay back a loan. Unlike other lenders, Earnest requires borrowers to have at least 3 years of credit history, a minimum FICO score of 650, and a minimum annual income of at least $35,000.

6. Education Loan Finance

The unique thing Education Loan Finance offers is a referral bonus. All borrowers need to do to collect on the bonus is sign up for a referral link, share the link with friends through email and social media, and collect $400 for each friend that refinances through ELFI. The friend gets $100 toward the principal balance of their new loan. ELFI has higher standards than many student loan lenders and expects borrowers to have at least 36 months of financial history, a $35,000 per year income, and a credit score of at least 680. Students can borrow money if they are enrolled at least half-time. Every applicant at ELFI is assigned a Personal Loan Advisor, in order to help with the process and with any questions or problems.

7. MPOWER

MPOWER is a student loan lender designed by international students for international students. While other private lenders have more strenuous requirements, MPOWER Financing is one of the best lenders for borrowers with no credit history. Loan amounts range from $2,000 to $50,000, and borrowers have 10 years to pay back the loans. While there is no application fee, MPOWER does charge a 0.5% origination fee, although it is added to the balance of the loan and can be paid off over time. MPOWER offers several discounts, including autopay, on-time payment, and proof of employment and graduation. Borrowers don’t need to worry about co-signers because the process was set up so students wouldn’t have to worry about their credit history or score.

Loanry is here to help you with everything you need concerning student loans. We not only provide hundreds of informative articles on various financial topics for free, we also help you connect with the best lenders out there.

What You Need to Know About Saving Money on Your Student Loans

It is possible to save money on your student loans. While owing tens of thousands of dollars to student loan lenders is not uncommon, it is also not encouraged to take out more than you need. Many students just blindly accept the full loan amount when they get an offer from student loan lenders, but this is not required. You can choose how much you take, based on how much you really need. By not taking the full amount, you will save yourself from paying back interest later on the money you took and didn’t really need.

Besides just borrowing smart — by only borrowing what you need, you could also save money on your student loans and borrow less money by saving money before college starts. If you are only looking into student aid options when you are applying for college, then it may be too late, but if you are planning ahead, then you could save yourself from borrowing at least a fraction of your education expenses. You could get a job while in high school and save most of the money you make, as well as save any money you get as a gift for your birthday or Christmas. You and your parents can take advantage of programs like Ascensus College Savings that allow you to save money toward your education on purchases you make anyway, such as for gas or groceries both before and during college.

What You Need to Know About FAFSA

If you have been filling out college applications, then you have probably seen the acronym FAFSA. You may not have known what it stands for though: “Free Application for Federal Student Aid”. If you need assistance paying for college tuition, then filling out the FAFSA should be your first step. You should get a better understanding of the FAFSA and how it could possibly help you decrease the overall amount you need to borrow from student loan lenders. Filling out the FAFSA is the prerequisite to receiving any kind of federal financial aid, including:

Grants 

Grants are a great option of federal financial aid because they are basically an offer of free money. They typically do not have to be repaid, unless you withdraw from school and owe a refund or if you do not complete your service requirement, which applies if you receive the Teacher Education Assistance for College and Higher Education (TEACH) Grant. There are many types of federal grants available, but one of the most common is the Pell Grant. You may qualify for a Pell Grant if you can prove you have financial need and if you have not yet received your Bachelor’s degree.

Scholarships 

Scholarships are also a form of free money. They can come from a range of places, but one way to get scholarships is through the federal government. You could also find other scholarships, whether for academic merit — if you got good grades in high school, talent — if you play sports well, or for your particular area of study. Just be careful to avoid student loan scams when applying for outside scholarships. Your high school can help you find places to look for scholarships.

Loans

Loans are not free money. They are borrowing money, which you will later have to pay back, with interest. While it can be overwhelming to pay back your student loans, with interest, there are several repayment plans you can choose from. There are four types of direct loans to choose from, including direct subsidized loans, direct unsubsidized loans, direct PLUS loans, and direct consolidation loans.

Work-Study Jobs

Work-study jobs are made available through the Federal Work-Study Program. These jobs are a great way to earn some extra money for education expenses while in school, through part-time work. Getting work-study financial aid allows you to sometimes find a student job more easily since the money is funded by the government, so whoever you work for does not have to pay as much themselves. This is a great option, since you can work either on or off campus, though working on campus oftentimes means more flexible work hours, which will help you to fit in work around your academics.

Federal student aid isn’t your only option. You could also get aid from your state government or even from your college or university. Plus, don’t miss out on tax benefits for higher education, including tax credits for higher education expenses and student loan interest deduction.

Conclusion

Before searching for a student loan, make sure you do your homework. Knowing the statistics of student loans in the US and understanding the benefits of filling out your FAFSA and turning it in on time can help you make a more informed decision when choosing your student loan lender. Do not choose the first student loan lender you find, but rather shop around to find the best student loan lender for your situation. If you have any questions, many student loan lenders are more than willing to answer and help you, so don’t hesitate to ask!

A Lesson on Federal Student Loans vs. Private Loans

Fingers walking on pile coins saving to hat graduation model

When it comes to covering the ever-increasing costs of college, it can get a bit confusing. There are several options to help with the expenses, the most common being federal student loans and private student loans. There are advantages and disadvantages to each of these choices, so how does one know which route to go? Let’s start with an overview of both.

Federal Student Loans and Private Student Loans

There is a lot to consider when you are trying to choose between federal student loans and private ones. Each comes with its own ups and downs.

However, when compared carefully, there is a logical route to take when trying to cover the costs of college:

1. Fill Out the FAFSA

Even if you do not believe you will qualify for anything, it is worth trying. You just might find yourself completely surprised. And even if you do not qualify for subsidized loans, you still need to fill out the FAFSA for potential unsubsidized loans. You will not know what is available until you do.

2. Grants and Scholarships

Apply for as many grants as you can. If you qualify for the Pell Grant, the Student Aid Report generated by your FAFSA will inform your school of that. Also, if you are a minority, have a special interest, or a special skill, look into potential scholarships. For more information on grants and scholarships, talk to your financial aid advisor or a high school counselor, your religious group, and any organizations you or your family is a part of.

3. Subsidized

If you qualify for any subsidized loans, take them. You will not need to worry about any interest or payments while you are still in school.

4. Unsubsidized

Next, accept any unsubsidized loans that you qualify for. While you might- keyword here is might- get a higher loan amount and lower interest rate from a private loan, many experts agree that unsubsidized loans are still the best option. This is because, between those and private loans, unsubsidized loans are the only ones that offer several repayment options in case you hit financial trouble.

They might also be forgiven and you could consolidate them for a lower interest rate in the future. Even if you have several student loans, you can use the national student loan locator to track down all of your lenders. From there, you can calculate your total balance owed and consolidate them all into one payment, preferably with a lower interest rate and more favorable terms.

5. Other Sources

If you still need some help to cover college costs, consider ways you could make the money to cover them. Could you pick up a part-time job? Take on a work-study program? Have a giant yard sale? Get personal loans from family members? Income share agreement maybe? Do some odd jobs, like cleaning houses or babysitting? Is there a way to cut your college expenses, such as buying used textbooks or living with your parents instead of on campus? Is there a subject you could tutor others in? Get creative. Every $100 you can find on your own is $100 you do not have to borrow.

6. Private Student Loans

Only after you have exhausted all other options should you apply for private student loans. While they can be very helpful, they have too many potential downsides to be the first choice. Instead, they should be your last resort. Otherwise, you may find yourself struggling to make loan payments while you are in school.

Following this sequence of funding should help you obtain the best financial aid package that you can get. Every student’s situation is different, of course, and many students end up with a combination of many loan types. The key is to take advantage of the best loan options first and let the less desirable ones be a “just in case” option.

Understand what your loan will cost along with all additional fees so you can be realistic about paying it back. Let Loanry try to help you. Our partnerFiona brings you the best offers from different lenders.

How Federal Student Loans Work

Federal student loans come from the government- namely the U.S. Department of Education. In order to qualify for federal student loans, you start by filling out the FAFSA, or the Free Application for Federal Student Aid. The FAFSA asks questions based on your income and your parents’ income if you lived with them in the previous year.

Through the information it gathers, the government determines what- if anything- you might be able to pay out of pocket for college costs. This amount is called the Expected Family Contribution (EFC). Depending on your financial information, your EFC could be as low as $0.

Whatever your EFC, the school or schools you apply to will subtract that amount from their cost of attendance to determine how much aid you will need. They will then put together grants and federal student loans to cover your financial need. Some low-cost colleges, like community colleges, can be covered with a Pell Grant alone.

Others will need a combination of several aid types. If you can use only grants and scholarships, you are in good shape as those do not have to be repaid. Federal student loans do have to be repaid, so that needs to be taken into account when you are accepting an aid package.

If you are approved for grants and federal student loans, your aid is disbursed to your student account to pay for your tuition and other costs. If anything is left after paying the necessary costs, you can opt to have the rest either sent back to the loan provider or use it for other living expenses.

Federal student loans are a more popular option. In fact, of the approximate $1.5 trillion student debt, about $1.4 trillion in federal student loans while the rest is private student loans. Let’s take a look at why federal student loans are so popular and some of the disadvantages, too.

Advantages of Federal Student Loans

The several upsides to federal student loans are usually the deciding factors among students:

Does Not Rely on Your Credit

Federal student loans are based on your income and your need- not your credit. This makes them the best option for school loans for bad credit. Many students would not be able to attend school if their loans relied on their credit scores.

Repayment Options

When it comes time to repay your loans, there are several repayment options. These include IDRs or Income-Driven Repayment plans. Approval of an IDR means that your monthly payments are based on your income, and some low-income individuals even qualify for a $0 repayment plan for a set period of time.

While it likely will not last forever, it does give you the opportunity to get to a better financial state. IDRs are not the only repayment option, though. There are several programs that can help lower your monthly payments.

Potential Loan Forgiveness

In some cases, you can even get a portion or all of your student loans forgiven. Not everyone qualifies for student loan forgiveness, but it is a possibility- and it never hurts to try.

Interest

One of the great things about federal student loans is the interest. They generally come with a low, fixed interest rate. This means that no matter what other interest rates are doing, you will pay the same interest rate each month. The interest typically stays under 10 percent with some loans being as low as 3 percent.

Subsidized

Some federal student loans are what is known as subsidized. This means that while you are enrolled in school at least half time, the government pays your interest. You also have six months after graduation before the interest begins to accumulate, giving you time to start your career. During times of deferment of subsidized loans- times your payments are put on hold- you will not be charged interest, either.

Statistic: Number of recipients of federal student aid in the United States, by program in 2018/19 (in millions) | Statista

No Prepayment Penalty

While it is certainly not required for you to prepay any loans, you can do so without penalty when it comes to federal student loans. Many other loans, especially private loans, do penalize you for prepaying your loans. There are also federal programs through which you can refinance your loans.

Unsubsidized Loans

There are also unsubsidized loans that do not rely on your financial need. The difference is that the interest begins accruing as soon as the funds go to your school. However, that interest is still pretty low.

Disadvantages of Federal Student Loans

As great as federal student loans can be, they also have their downsides:

Lower Loan Limits

Federal student loans do come with loan limits as your aid is not allowed to surpass your financial need. Often, this can result in low loan amounts that do not cover all of the costs associated with college, leaving students to borrow from other sources.

Recertification

To remain eligible for grants and federal student loans, you must recertify every year by completing a new FAFSA. Granted, this is a small price to pay for help to pay for school, but it can be an inconvenience. Also, if you miss the deadline to apply, you may have to put off classes for a time.

Rules on Use

While there are federal student loans that can cover the full cost of attendance, there may be limits on what you can use the loans for exactly. If this is the case with your particular loans, it will be in the agreements you sign or you can ask your financial aid office for information.

How Private Student Loans Work

Private student loans, on the other hand, come from private sources. These include banks and credit unions, individuals, sometimes companies and corporations, and other private lenders. The application process is a bit different from federal student loans since private student loans are based on credit and financial resources. If your credit is not in good shape, you will likely need a co-signer.

Federal and Private student loan features

You can apply on your own through different banks and online lenders. However, your school may be able to help. When I was getting my loan package and needed extra funds, it was my school’s financial aid office that found me a private loan. They also acted as the go-between to get all contracts signed. If you need a private loan, ask your financial aid advisor if he or she has any information on where you should apply.

If you are approved for the loan, you can use it toward any education expenses you choose. The funds are typically sent directly to your school. With some private school loans, you can have any remainder left after those expenses sent to you for living expenses. With other private loans, they will be for the exact amount you need so there will be none left over.

Advantages of Private Student Loans

Private student loans may be a less desirable option, but they do have some benefits:

Higher Loan Limits

As private student loans are based on credit instead of need, you may qualify for higher loan amounts than you can receive through federal student loans. Additionally, with a high enough credit score, you might qualify for a lower interest rate than with federal student loans.

Not Need-Based

Private student loans are not based on need, meaning that anyone has the potential to receive them. This opens the doors to those who may not have such a high need but also cannot afford to pay for school upfront.

Great Supplemental Source

Sometimes – depending on your particular school and degree program – you will not be able to receive enough grants and federal student loans to cover the full cost. And if you have to retake a class or even decide to switch majors mid-program, you may not have enough federal aid to take care of it. This is where private student loans really shine. They are a great supplement to other types of aid.

Disadvantages of Private Student Loans

For many people, the disadvantages of private student loans far outweigh the benefits:

Variable Interest

Private student loans often come with variable interest rates. This means that your interest rate will fluctuate according to external factors. Every month, the amount of your payment that applies to the principal might change, making it more difficult to know when you will have the loan repaid.

No Subsidized Loans

Unfortunately, private student loans generally do not offer any type of grace period. The interest begins accruing immediately. In addition to that, almost all private loans require you to begin making payments while you are still in school. If you hit a financial roadblock, you cannot have your loan payments deferred like you can with federal student loans. Your lender expects their payment on time every month, regardless of your situation. This is not to say that a private lender will not work with you, but it is not something you should count on.

Less Payment Flexibility

While we are on the subject of paying your loans, private student loans offer much less flexibility than federal student loans. We already pointed out that deferment is not likely, but it does not stop there. Private student loans do not offer repayment programs based on your income. You are tied to the payment that you signed on for.

Relies on Credit Score

As stated previously, private student loans are not based on need but on credit and the ability to repay. While that can be good for some people, there are still many that do not have the credit score that they need. This leaves a gap in the middle- the students that do not qualify for enough federal aid yet do not have the credit they need to be privately funded.

Try to make your payments on time every month. In this way, you will boost your credit score. Keep in mind that your payment history can impact your credit score later.

No Loan Forgiveness

With federal student loans, there is at least the possibility of loan forgiveness. With private student loans, that is not the case. You will have to repay those loans, regardless of your situation or any other qualifications that might allow your federal loans to be forgiven.

Conclusion

Making wise choices when it comes to funding your college education is imperative to your financial future. With people in their 90s still owing student loans, choosing between the various options can be scary. No one wants to still be in college debt all of their life.

As such, it is important that each and every student carefully consider their options. We hope that this overview has given you some clarity on which direction you should take. As always, if you need additional information, consider consulting a financial advisor.

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 StudentLoans.gov, 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.

Affiliations

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.

Taxes

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.

Conclusion

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.

A Syllabus For The Cost for College Students in America

Yale University, New Haven

Student loan debt has been a major point of discussion for some time now. It really is not surprising, though. The national student debt adds up to more than $1.64 trillion. Yikes! That is a lot of debt, and it comes from 44.7 million Americans.

So, keep reading to find out how you can save money on your college journey and what is important to know before you decide to take a student loan or before any kind of borrowing money for college.

Make Your Perfect College Plan Considering These Common Costs for Students

If you or a loved one are preparing for college, numbers about national student debt probably scare you a bit. That’s understandable- debt is a scary thing. I get a little queasy every time I think about my own student debt. There are so many things that I wish I would have known before getting into that debt. I had no clue what I was getting into at the time, or how I could have changed it.

That is no longer the case, though. I have learned from my mistakes when it comes to debt and college costs, and I want to share those lessons with you. We are going to make our way through the most common costs for college students and talk about how to minimize them.

Tuition

It does not matter what school you go to, what degree program you enter, or where you live while you are in school- tuition will always be the biggest cost for college students. Tuition covers the cost of actually taking the courses. It is usually charged per credit hour and can vary wildly.

The cost for college students to receive a four-year degree can be anywhere from $20,000 to hundreds of thousands. As of 2019, the average in-state public college degree averaged about $26,500 while a private college education averaged about $53,000, which is actually considered to be a “moderate” cost for college students at private schools. That, my friends, is not moderate by any stretch of my imagination.

The short and simple truth to it is the tuition cost for college students depends largely on the school they attend and the degree program they enter. I do not want to push anyone away from attending a school they really want to go to, but when you are trying to cut the tuition cost for college students, you should consider the following:

Is there a reason that you want to attend this school specifically? If a high priced college has offered you a scholarship or something else, by all means, go for it. If you have been promised a well-paying job if you graduate from that college, go ahead. However, if there is no set reason you want to go there, ask yourself if you could consider a lower-cost option.

Higher College Cost doesn’t Mean You Will Get a Better Paying Job

Could you achieve the same career by earning a certification in that field as opposed to a full four-year degree? Even after earning a Master’s Degree, I still find myself getting more use out of a certification course that took me three months to complete.

Does that school have better results than others? I am not talking about test scores or anything like that. I am referring to the results after the students graduate. Does a high percentage of graduates get really good jobs after graduation? Is that percentage higher than in other schools?

Unless you are getting grants and scholarships to cover the entire cost, you will be in debt when you leave college. Well, also unless your family has money and can afford the cost out of pocket. Otherwise, you are probably going to owe some student debt. The amount of debt depends on a lot of factors, but the point is this: If you attend a really expensive college, are you going to be able to get a good enough job to cover those high student loan payments and still live comfortably? Think about it. While everyone believes that doctors have tons of money, it actually takes them a while to work off their medical school debt. That does not mean that you should not go to medical school, but it is something to consider carefully.

The point that I am trying to make here is that the higher cost colleges do not necessarily equal the highest paying jobs or the biggest bank accounts. If you- or your loved one- want to attend a school with a high tuition cost for college students, just examine the reasoning behind it and make sure it is sound. Otherwise, you may end up in unnecessary debt.

School Fees

In addition to tuition, most colleges charge school fees. These can literally be for anything, depending on the college. Some fees are charged to cover the use of the library, gyms, or other areas that need to be maintained. There may be technology fees to cover the use of computer labs, health fees for visits to the college’s health center, or anything else the college offers.

Fees are a way of spreading the cost of upkeep and maintenance among everyone. They are not really a bad thing as they go to benefit all students, but they are something to keep in mind when considering the overall cost for college students.

Statistic: Average annual cost to attend university in the United States, by institution type 2013-2020 (in U.S. dollars) | Statista

Room and Board

Room and board are another area that can vary wildly. The average room and board cost for college students attending private schools averaged almost $13,000 last year. Public schools were not far behind, coming in at about $11,500.

Some students opt to live off campus. This does not necessarily guarantee a lower cost, but it does give you a little more control. It allows you to find a place within a budget you can work with. You might also choose to live with some roommates to lower your cost. If you live off campus, though, you must also consider that you will be providing more of your own food, so that is a cost you will need to calculate yourself.

Some other students decide to go to college near home and continue to live with their parents for a time. This is definitely a way to save money overall, but it is not an option for all students. If you have this choice, talk it out with your parents and decide together if staying at home for a while is the best move for everyone.

Books and Supplies

Sometimes, the quoted tuition price includes an estimate of the cost for college students to purchase their textbooks. This estimate is just that- an estimate. The textbooks may costs more or less than that as the ones you need will depend on your classes. The average cost of books and supplies for the 2019-2020 school year was more than $1,200.

Even if that estimate is accurate, it does not include the various other supplies you will need. You still have to consider the cost for items such as:

  • Notebook paper
  • Pens and pencils
  • Highlighters
  • Notebooks and binders
  • Study guides
  • Calculators

And pretty much all of the other items you need for studying and completing your classwork.

Equipment

Let’s not forget the other items you will need to help in your day to day life. You will likely need things like:

  • A laptop/tablet and printer, flash drives, and similar items
  • Microwave/hotplate for your dorm or home
  • Cooking items, like pots, pans, and utensils
  • Sheets, towels, and blankets
  • A vacuum
  • Lamps
  • Any specialty items for classes (like a camera if you are a photography student)

If you are living in your own home off campus, you will need even more, like a bed, furniture, and appliances. You might be able to find a place that is furnished, but if not, do not forget items for your home.

Transportation

The transportation cost for college students varies according to how much they will be traveling. For those living off campus, the cost will include fuel for your car, insurance, and more. If you are attending college away from your family, you will need to calculate the costs of traveling home on your breaks.

Personal Expenses

The tuition cost for college students does not include any personal expenses. Groceries, toiletries, medications, streaming services- like Netflix- clothes and laundry, entertainment, and anything else you choose to purchase is in addition to tuition and fees.

Tips for Cutting Costs and Limiting Your Debt

Here are a few other “tricks” to help you cut your costs:

Shop Student Loans

I hope from the bottom of my heart that you can get enough aid to cover your full costs and not have to take out any student loans. I know what it is like to be in that debt and I would not wish it on anyone.Questions Before you get a student loan

Regardless of my hopes, though, you may find yourself in need of them, so I want to give you some very important advice here: Do not just accept the first loan you are offered. You should actually do some student loan shopping.

Not all student loans are created equal. The interest rates vary. Some charge interest while you are in school and others wait until you graduate to start calculating interest. Student loans can be as different as any other financial product. Do your due diligence and compare different student loans. Remember, this is a debt you will be dealing with for a while. The better loan terms you can get, the better off you will be.

And here is another thing: You do not have to stick with loans categorized as “student loans”. Student loans are widely accepted as a way to pay for college, but it is not the only way. You might find that you can get a personal loan to cover some of your school costs and that personal loans might have a much lower interest rate and better repayment terms than any student loan you can find.

The point I hope I am getting across is that you do not have to be stuck inside a box just because “that’s the way it is”. Be open-minded when it comes to covering your college tuition.

Getting a student loan from a credible lender is extremely important. You don’t want to get scammed. Loanry is here to help you make sure you’re on the right path.

Purchase Items Elsewhere

There is a pretty good chance that shopping on or near your campus for supplies and personal items is going to cost you more than in other areas. Have you ever noticed on vacation that sunscreen, deodorant, or other necessities cost about twice as much as they do at your local store? This is not an accident.

Retailers in vacation spots know that tourists will probably need those items, and take advantage of the fact that they will have to purchase from that store. What are they going to do? Run home and pick theirs up? No, they are going to buy what’s available, even if the price is sky-high.

Many college areas are like this, too. The retailers know that students need the items that they sell and that they probably will not travel to a different location to get them. Therefore, they can charge a higher price. This is not the case in every college town, but it does happen in many of them.

The best way to combat this is to purchase your items elsewhere. Take as much as you can with you from home. Every time you go home on break, stock up on what you can. Ask your parents to purchase what they can when the back to school sales are over. Also, shop online. You are bound to find your items much cheaper there.

Skip the Campus Bookstore

You do not have to purchase your textbooks at the campus bookstore. In fact, purchasing your items at the campus bookstore is a huge cost for college students- and an unnecessary one, at that.

Forego the bookstore and buy used textbooks online. Textbook Rush, Knetbooks, Thriftbooks, and Amazon are all excellent websites to get low-cost textbooks on. You can even rent any of the available books or choose to read the digital copy for much less than anything you could buy at the campus bookstore.

Use Delivery

Minimize your transportation costs by taking advantage of delivery. We all know that you can purchase just about anything on Amazon. At the time of this writing, Amazon is offering six months of Amazon Prime for free to students. After that six months, it is only $6.99 per month. That $7 could save you a ton of gas.

Learn to Cook

Eating pizza and fast food all of the time is going to cost you a pretty penny. Save some dough by learning to cook just a few meals. Even if you live in a dorm, you can have a hot plate to help you cook. You do not have to become Gordon Ramsay- just learn to cook enough to keep your food costs low.

Online Courses

As a person who has attended college both online and on-campus, I can attest to the convenience of online courses. If you have the option to take any of your classes online, you should consider it. It often costs much less to attend online courses.

Be careful of the classes you take online, though, as you are not getting all of the benefits- like asking your professor for help. Yes, you can do that with online courses, but it takes time to get a response. If the class is on a subject you normally do well in, you will probably be fine taking an online course. If you struggle with a subject, for instance, math, you should probably attend the live classes.

Talk to the Financial Office

Before you choose a college- before you turn down an expensive school or choose a lower-cost school due- talk to the financial office at the school. Sometimes, those higher-priced schools have more scholarships and grants they can give out than other schools. Some kids have gotten enough assistance from their schools that they end up only paying the tuition of a lower-priced school.

They say, “Don’t judge a book by its cover.” Well, you also should not judge a college by the “sticker price”. You should be more concerned with what is referred to as the “net price”. This is the amount of tuition you are left to cover after any grants and scholarships are applied. It does not matter if a college costs $10,000 per year unless you are stuck covering that entire amount.

If, however, your scholarships and grants cover $8,000 of that each year, you only have to worry about $2,000 of the tuition. That amount may be lower than what you would have to cover at your local community college. So before you make any decisions, determine the net price of that school.

Conclusion

You have many options to pay for your college. Except scholarships, there are also and student loans, credit cards for students, etc. Take control of your college costs and your financial future by cutting down where you can and making wise decisions. Doing so can help you avoid or minimize your student loan debt.

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.

Competitions

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.

Conclusion

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.

Your Educational Guide On How to Pay for College

Hat graduation model on banknote saving for concept finance education and scholarships

So you’re thinking about going to school – or going BACK to school – or helping someone you love to go to school. Whether it’s you, your partner, or one of your kids, it’s always exciting to think about the possibilities of post-secondary education. Sometimes that means living on campus and taking on the full “college experience.” Other times, and increasingly common these days, it might mean needing a good laptop and reliable Wi-Fi because you’ll rarely actually see your professors or the people in your class. Sometimes it’s a mix of the two.

Whatever the case, it’s very possible that it’s your job to be excited and supportive, or – if the student is YOU – to be committed and hard-working. Maybe you’re trying not to sound worried, or focused on the “wrong things,” but chances are somewhere in all of the positive energy is a rather daunting issue.

Quote about education

You’re going to need to figure out how to pay for college.

Get the Money For Your Education: Student Debt Hacks

A decade or two ago, the answer would have seemed simple. How to pay for college? Student loans! Take out as much as you can from as many places as possible. And defer repayment for as many years as you can get away with! By the time you have to make your first payment. You’ll have a great career and tons of money and you won’t even miss that monthly installment!

Awesome, right?

Unfortunately, it didn’t always work out quite that way. It turns out college kept getting more expensive. And graduates often didn’t end up in the careers they expected making the kind of money they’d planned. Those loans kept coming due anyway. And before you know it, Bernie Sanders, Elizabeth Warren, Pete Buttigieg, and Andrew Yang are all on stage arguing with Joe Biden – who just looks confused – about how to bail out half the country from their student loans.

In other words, it got bad enough to become a heated political topic – right up there with our involvement in foreign wars. And whether or not we should keep building “the wall.”

Suddenly, student loans were terrifying. They’re everyone’s absolute last option for how to pay for college. That’s not entirely fair. Student loans are a necessary option for the many college students, no matter what their age range or where they’re attending. And if you learn how to save money on a student loan, it can be a really good option for you. But let’s look at some other possible answers for how to pay for college first, then come back to them.

Save Up Ahead of Time

Here’s a great plan: before you enroll in college, work real hard and save up lots of money. So when it’s time, you can just pay cash and the problem is solved.

Alright, thanks for reading! We’ll catch you next time when we talk about—

What’s that? This isn’t a realistic plan? Are you sure?

Obviously, it’s ideal if you’re able to start separate savings account well ahead of time, whether the student is you or your offspring or anyone else for whom you’re responsible. Keep in mind that even a few thousand dollars can make a huge difference when it’s time figuring out how to pay for college. In addition to tuition, there are application fees, textbooks to buy, on-campus housing, and endless other expenses to consider. The ability to pay for many of these peripheral costs out of savings simplifies things considerably. And the less you have to borrow, the better.

Grants and Scholarships

Everyone knows that grants and scholarships are amazing, primarily because you don’t have to pay them back. The trick, sometimes, is finding them. They come from so many different sources. And because they’re often privately funded and target specific schools, demographics, majors, or other factors, there’s no one source for locating all for which you might qualify.

That does not mean, however, that you should ever, ever, EVER pay someone to look for grants, scholarships, or any other sort of financial aid for you. There are no secret codes for tracking these things down – no private databases or inside tracks. Every possible bit of information related to financial aid is free for the asking, and that’s how it should stay.

I’m going to assume you’re already familiar with the FAFSA. It’s your one-stop ticket for anything offered through state or federal government or the college or other post-secondary institution of your choice. The FAFSA acts as an informational tool for schools you’re considering, so they can help you with options. And a sort of universal student loan locator – at least when it comes to traditional student loan options.

You should always complete a FAFSA early in the process, however you plan on paying for school and whether you expect to qualify for aid or not.

The stuff that we’re talking about are things like that $500 scholarship your parents’ church offers for anyone going into the ministry, or the $2000 a local Native American group has available for anyone who can establish tribal membership or money from a local industry to support students pursuing training in electronic engineering or plasma physics or arts and crafts. Whatever it is they need more of but can’t find enough of.

The Magical Grant and Scholarship Locator

Do you have a mirror handy? It’s necessary for the sacred ritual which calls forth She-or-He Who Knows How To Pay For College Via Grants and Scholarships. You’ll also need a small glass of wine – preferably something red and inexpensive – and one of those little party favors you blow so it uncurls and makes that horrible baby duck noise. How many candles you light, and of what sort, is entirely up to you, as long as you have enough light to use the mirror.

Ready? It would be better if this part were in Latin. But I’m going to stick with modern English so it’s more accessible.

Hold up the mirror carefully, so that you can see your reflection in the candlelight. Now repeat these words: “I should start looking for some grants and scholarships myself because no one else is going to do it for me. And I’m not foolish enough to pay someone to do it.” Now, drink the wine and blow the party favor in celebration of a spell well-done, then get to work.

Gather all the information from the high school/college office

Start with your (or your kid’s) high school counselors or the college and career office in your district, if such a thing exists. You may find tons of excellent information, or you may be handed a few generic brochures or pointed to a website or two. They may be totally confused as to why you even asked. That’s OK, though, because it was worth asking. Sometimes those high school counselors are a gold mine.

Next, talk to the financial aid offices at your top 2 or 3 choices for where you’d like to attend. Find out what connections they have, what they know about, what they suggest. Your chances are much better with this group. Since they don’t make money unless you come to school there, and coming to school there means finding a way to pay for it. Try everything they suggest, whether it makes sense to you or not. No matter how successful, or not, we’re not done.

More Magical Locating (Still Figuring Out How to Pay for College)

Go to your local library (or call, if for some reason we’re all still “social distancing” by the time you’re ready to get started) and tell them what you’re looking for. Once again, you’ll often hit gold with this option. But it depends on who answers the phone or who’s at the desk. If you don’t get satisfactory responses the first time, try again during a different time of day or – better yet – a different branch.

Get online, but let me repeat – NO LEGIT ORGANIZATION IS GOING TO TRY TO CHARGE YOU FOR GRANT OR SCHOLARSHIP INFORMATION. You’re better off trying to help out that Nigerian Prince if you insist on being careless with your financial and personal information online. Instead, try the U.S. Department of Labor’s free scholarship search tool. Search the name of your state plus the words “grants and scholarships.”

Ask your parents to check with their employers. The bigger the company, the better the chances they have some sort of aid available. If you’re working, check with your employer. Even companies like McDonald’s are advertising their willingness to help with tuition for their employees Although, it’s probably safe to assume there are some strings and limitations attached.

But that’s OK because your goal at this stage isn’t to accept or refuse anything – it’s to gather options and information. Remember, you’re the Magical Grant and Scholarship Locator. By which I mean, you’re putting in the time and effort to find grants and scholarships to help you figure out how to pay for college.

How to Pay for College? Get Affirmative With Your Actions

Finally, ask yourself what “groups” you might belong to. Any demographic outside of “generic straight white able-bodied male” has organizations and advocates scattered across the country, many of whom offer small grants or scholarships for those who qualify. Now, you may be the sort who doesn’t like to see yourself as a member of this group or that. Maybe your politics or personal preferences are such that you don’t want to “play that card” for personal gain.

With all due respect, in this case, you need to get over that and apply for the grant or scholarship. The best thing you can do for yourself, your “group,” your community, family, state, or nation, is getting that education and be all you can be personally, professionally, and financially. If that means that for once in your life you have a chance to exploit the fact that you’re a one-legged transgendered Czech-Irish Buddhist, then go for it.

Don’t worry, we’re not going to think less of you for claiming that $400 stipend from the local chapter of similar folks.

Student Loan Shopping

There are a number of things to consider when it comes to student loans. And figuring out how to pay for college.

Traditional student loans (the ones offered through the federal government) have several advantages:

  • Fees and interest rates tend to be lower than what you might otherwise qualify for.
  • Your credit score is not a major factor in determining whether or not you qualify.
  • Repayment is often deferred until graduation or sometime thereafter.
  • Repayment can be tied to your income, so the less you make, the less your payments.
  • There are sometimes options for “debt forgiveness” if you work in certain professions or specified geographical locations.

Now, I’m about to talk about some other options for how to pay for college, or at least how to pay for part of your post-secondary education in other ways, should you so choose. That doesn’t mean I’m against student loans. As with any loan, I merely suggest you pay attention to the details. And don’t assume anything about the terms or your ability to repay without taking some time to consider all of the possibilities.

I’m not interested in telling you WHAT to do, my friend. If you’re about to enter an institution of higher learning, you should be able to do student loan shopping, gather information and consider your options. Then decide for yourself how to pay for college, yes?

Paying For College With Personal Loans

A personal loan is your most basic sort of loan. You borrow a specific amount for a set length of time. And agree to an interest rate and a structured, predictable plan of repayment. The terms you’re able to secure are largely driven by your credit history and three-digit credit score. Although, your current income and anticipated employment may play a role as well.

If you’re pursuing post-secondary education other than that offered in a traditional four-year university, a personal loan for students might be a helpful option. Not all forms of training or education qualify for traditional college loans, or the amount may be modest enough that you’d rather tackle it like any other financed expense. I’m not pushing this option for everyone. But depending on your circumstances, it might be the simplest and most obvious solution.

The Income Share Agreement (ISA)

This is an arrangement you make directly with your school of choice. Rather than borrow money for tuition with specific terms guiding repayment, you commit a percentage of your future income to the school instead.

The flexibility of the income share agreement is obvious – if you end up with a strong income, the school gets paid back quickly. If you don’t make as much as you’d hoped, your repayment is based on a percentage of that rather than the amount you actually owe. Typical ISA agreements are tied to a length of time rather than a dollar amount. So if you agree to give the school 7% of your income for ten years, you might end up paying way less for your education (if things aren’t going well) or double what other students pay (if your career takes off).

Most financial experts aren’t in love with ISAs. Do some research and make up your own mind before considering this option.

College Student Credit Cards

The answer to how to pay for college is almost never “Use a credit card!”  That doesn’t mean, however, that responsible credit card use can’t be a part of your plan for incidental expenses as you pursue your education.

Keep in mind that while credit card companies aren’t necessarily evil. They do have a vested interest in “hooking you” early. And start you along the path of eternal repayment without ever being repaid. Don’t just assume you know all there is to know about credit cards for students and fall into the trap of going to either extreme – careless use and irresponsible debt or absolute refusal to carry any form of plastic.

College, among other things, is about learning to adults. Responsible credit card use is part of Adulting 101. With great power comes great responsibility. And learning to use revolving credit responsibly gives you financial power and stronger long-term credit.

Conclusion

There’s no one answer on how to pay for college. Take some time and weigh your options, and above all else, DON’T GIVE UP. It can be a frustrating mess sorting through your choices and keeping up with everything, but guess what?

Welcome to college and the messy world of grown-ups. It may not be easy, but you’ll get so much better at it is difficult that you won’t even notice after a while.

Quote about motivation

Let us know if we can help.

Various Types of Student Loans: Borrow Smarter

Graduation Cap for savings coins for scholarships for funding and education.

It isn’t easy to pay for a college education. The average price of one year at a public university, including tuition, fees, room, and board at the in-state rate is almost $21,000. The private school rate is almost $47,000. That can exhaust 529 plan savings pretty quickly. That’s why so many college students and their parents take out student loans to bridge the financial gap. So many loans that it is estimated there is $1.53 Trillion in student loan debt swirling around out there.

Everything About Different Types of Student Loan

When it comes to borrowing money to pay for college, there are options. Here is what you need to know about the types of student loans that are available to you.

Federal Student Loans

A loan is simply money you borrow that has to be repaid over time with interest. The federal government offers student loans and usually has better repayment terms than private lenders, like banks.

The federal government offers four types of student loans.

  • Direct Subsidized Loans-These types of student loans are for undergraduate students who demonstrate the need for assistance paying for college.
  • Direct Unsubsidized Loans-These are student loans offered to graduates and students. These types of student loans are not based on financial need.
  • Direct PLUS Loans-These types of student loans are for graduate or professional students or parents with undergraduate dependents who are students. These loans are designed to help with college expenses that aren’t already covered by financial aid. Borrowers of Direct PLUS loans have to pass a credit check.
  • Direct Consolidation Loans-These types of student loans allow a borrower with multiple outstanding federal loans to roll that debt into a single lump sum that is managed by a loan servicer.

How Do You Apply for Federal Student Loans?

The first step toward obtaining a fed student loan is to complete the Free Application for Federal Student Aid form, or FAFSA. Before you sit down to work on this application gather up your Social Security number, previous Income Tax Returns, and W2s that demonstrate your income. You may need bank records and records of investments as well. If you are a dependent student you will need to have all of this information about your parents as well. You aren’t eligible to receive any federal loans or grants until your FAFSA is completed.

Based on the results of the application, your college or career school will make you an offer of financial aid that may include grants and loans. This is the time when you will be able to compare the financial aid being offered to you by different schools.

Before accepting an offer of federal student aid, you will be given counseling to make sure that you understand that the assistance is a loan that will have to be paid back with interest.

The FAFSA will need to be updated by you each year.

Schools often make decisions about scholarships based on the information in the FAFSA.

How Much Federal Aid Will You Receive?

Undergraduate students may have a borrowing maximum somewhere between $5500 and $12,500 each year in Direct Subsidized Loans and Direct Unsubsidized Loans.

Graduate or professional students can borrow up to $20,500 in Direct Unsubsidized Loans each year.

Parents with dependent children who are undergraduates may borrow Direct PLUS loans for outstanding costs of college not already covered by financial aid.

One important note about offers of federal financial aid. Just because the government offers you money, you don’t have to take it. You can accept only part of what is offered to you if it aligns better with your repayment goals.

What are Some of the Positive Features of Federal Student Loans?

Federal loans are usually offered at a fixed interest rate. And that rate is usually lower than what is available at banks.

Most of the time no credit check or co-signer is required when taking out a federal student loan.

Federal loans offer a six-month grace period between the end of college and when payments on the loan have to begin. This is designed to give new graduates the chance to get on firmer financial ground. Interest does accrue during those six months.

Loan Repayment

The federal government offers flexible repayment plans including some that are income-driven and assume you’ll be making more money as you gain experience in the work world. You can ask for new repayment terms at any time. The government also works with borrowers who are having trouble meeting their loan obligations. Sometimes payments are lowered or temporarily suspended so that the borrower can get back on track.

Loan Forgiveness

The federal government also has programs in place that sometimes forgives the balance of student loans. One is called Public Service Loan Forgiveness, or PSLF. It is sometimes available for borrowers who work in qualifying government jobs or jobs in the non-profit sector. After the borrower makes 120 monthly payments, the program could be used to pay off all remaining student loan debt.

There is also a Teacher Loan Forgiveness program that educators can apply for after they have taught for five complete and consecutive years in a low-income school. That loan forgiveness program could discharge up to $17,500 worth of student loan debt.

Federal and Private student loan features

Private Lender Student Loans

There are private lenders that are in the business of loaning money to college students. These types of student loans come from banks, credit unions, and some online loan shops. You should only begin shopping for private loans if you have already exhausted all the available options in loans from the federal governments. The interest rates tend to be larger than government-backed loans. And the student’s credit history plays a factor in the loan.

How Do You Shop for Loans from Private Lenders?

When you are shopping for a student loan through a private vendor you are searching for the types of student loans with the best interest rate and the most favorable repayment schedule. You want to apply to a number of lenders so that you can compare their offers. Unlike the FAFSA form, you will be filling out applications for each potential lender. Private lenders don’t allow you to change your repayment plan as the federal government does. Changing the terms of a private loan requires refinancing or consolidating.

Some online stores bring you multiple offers from lenders very quickly after filling out their forms. These include sites like Credible and College Ave. These sites work as a student loan locator service. Their lending partners prequalify potential borrowers for loans at particular rates. You don’t pay more to use their service. The lenders pay a fee to be a part of their network. You also fill out one application and you may see as many as 10 loan offers which give you the tools to make comparisons.

Filling out one of these online forms doesn’t impact your credit score at all. It is noted as a soft request. Only hard inquiries become part of your credit history.

Things to look for in private loan offers

Interest Rate

What is the interest rate on the loan and is the interest fixed or variable? Fixed interest is set for the life of the loan. Variable interest changes throughout the loan and is tied to a financial metric. Sometimes interest rates on a variable interest loan can change without much notice.

Length of the Loan

The shorter the loan the less interest you will pay, but each monthly payment will be higher. This step requires looking into the future and evaluating the payments you’ll be able to afford.

Credit Check

Private lenders will do credit checks on loan applicants. Expect to pay a higher interest rate on a loan if your credit score is less than 690. Your credit score is based on your credit history and is usually reported as a 3-digit number. Three of the major credit reporting agencies are TransUnion, Experian, and Equifax. Many lenders require a co-signer for borrowers with low credit scores. This happens to recent college graduates who haven’t yet build a solid history of managing credit and debt.

If someone co-signs for your loan, your credit history becomes meshed with theirs. If payments are missing or late it impacts the credit score of the co-signer as well as you.

Successfully managing a student loan is one way to build a positive credit history.

The Actual Cost of a Student Loan

It can be a shock to calculate exactly how much that student loan is going to cost you. This online calculator lets you plug in the amount you’re borrowing, the interest rate being charged and the length of the repayment schedule for all types of student loans. You instantly what the monthly payment will be as well as how much money you are actually borrowing once the interest is paid. This online calculator can also show you how much money you could save. And how much earlier you could repay the loan by making additional payments.

Some lenders will offer financial incentives to have borrowers automate their monthly payments out of their checking accounts.

There is no penalty to accelerate payments on federal loans and most private loans.

Should You Take Out a Personal Loan to Pay Off a Student Loan?

It is usually not a good idea to take out a personal loan to pay off any type of student loan. In general, the interest rates on personal loans are higher than student loans. And personal loans usually come with a shorter payback time. Most have to be paid in full in five years.

A personal loan will not come with any grace period to begin making payments as federal student loans do. The interest on a personal loan isn’t tax-deductible. The interest on a student loan is.

Income Share Agreement

An Income Share Agreement, or ISA, is a non-traditional method for financing a college education. An ISA is an agreement between the student and the school that the student will repay the cost of the education after they have graduated and are out in the workforce. Instead of borrowing money upfront to pay for college, this is money paid on the back end.

In an Income Share Agreement, the school calculates what it believes to be the student’s future earning power based on what they studied and sets the payments accordingly. Tying the cost of college to a student’s major requires complete transparency on the part of the school and how it reports student success.

Income Share Agreements are only available at a limited number of colleges and universities.

Should I Put College Costs on a Credit Card?

When it comes to paying tuition with a credit card there isn’t one answer for everyone about whether it is right or wrong. If tuition is going to end up as a balance on a credit card that is subject to high interest and late payment fees, then taking out a student loan is a smarter choice. But if you are interested in capitalizing credit card rewards, charging tuition to a card might be a good strategy.

If the credit card accumulates reward points based on each dollar spent, then paying for a chunk of college could rack up many rewards.

Some cards will offer a sign-up bonus that increases the number of reward points exponentially.

Some card issuers offer 0-percent interest for a limited time when the card is brand new.

If your card has a minimum spending limit before rewards kick in, then putting tuition on that card may be the way to get to that threshold.

There are some things to watch out for that may erase the benefits of putting the cost of college on a credit card. Not all schools accept credit cards. But most of the ones that do will add a convenience fee on top of the payment. A convenience fee on a big purchase like tuition may erase any rewards or benefits that were earned. Another issue with putting college on a credit card is that the limit on the card might not be large enough for a tuition-sized expense.

If you use a credit card for educational costs treat it like it is a debit card. Completely pay the balance when it is due so that interest doesn’t begin to accumulate. Student loans offer a much better interest rate than credit cards.

Should I Consolidate My Student Loan Debt?

Consolidating multiple types of student loans into one loan can make it easier to track what has to be paid and when it is due. If your loans are all federal loans you can request that they are consolidated. The interest rate will be based on the interest rates of the original loans, so this isn’t a way to reduce payments by scoring really low-interest terms.

When private loans are consolidated it is usually referred to as refinancing. It is often done to capture a better interest rate. If you are consolidating federal loans and private loans into one package the federal loans lose some of the special considerations they once had like repayment options and forgiveness.

Conclusion

The first steps toward paying for a college education include tapping savings, applying for scholarships and grants and investigating work/study opportunities. But if you need student loans to bridge the gap between what you have and what college costs, start with the federal government. The government is in a position to offer the best interest rates on these types of student loans. The federal government usually doesn’t need a credit check before the loan is originated and offers a six-month grace period where no payments are due after graduation. Borrowers can request to change the repayment terms of their loan or consolidate multiple federal loans into one loan at any time. If you are beginning the search for federal loans you have to fill out a FAFSA form located on the www.studentaid.gov website.

Private lenders also issue student loans. They usually come with a higher interest rate than federal loans. When shopping for private loans you can compare the terms different lenders are offering you on these types of student loans. That includes interest rates and the length of the loan. You can go to individual lenders, like banks or credit unions, and fill out applications for each one. Or you can go to an online mall and fill out a single application that can prequalify you and pair you with loan quotes from the site’s preferred partners.

No matter where your loan originates you should commit to paying it back in full and on time. That will help you build a solid credit history.

How to Find Your Student Loan Servicer: Smart Tips

Female student study in library using tablet and searching internet while Listening music

Student loan or campus loan repayments can be confusing. You know you have to make the payment. But where do you send the payment and where do you find your student loans? You won’t necessarily be paying the same entity that lent you money. Your student loan servicer and lender could be different so there are some things you need to know.

Finding a Student Loan Servicer

Finding your student loan servicer will be a different process depending on whether you have a private student loan or federal loan. If you have both types of loans, you will have to find your servicer for each one. There are nine different federal student loan servicers so it’s easier to find your servicer for your federal loans.

If you have a federal student loan then go to the National Student Loan Data System and use it as a student loan locator. Click on Financial Aid Review and then log in using your FSA ID. If you don’t have an ID number then you will have to create one. Once you log in you can see a summary of the loan data. This includes the different types of student loans you have, the amounts and any outstanding balances, and interest. Each loan also has a number next to it. And, if you click on it, it expands your information and contact information for the lender at the bottom of the page.

National Student Loan Database Login

If you have student loans that are private, it takes a little more work to find the student loan servicer. It helps to start looking at your credit reports. And you are able to access your reports from the three main credit bureaus. You can also check your most recent loan statements to find the servicer.

What Does a Student Loan Servicer Do?

The student loan servicer is the company that manages your student loans. They act as a third party and a middleman between your lender and you. When you do make a payment toward your loan, it is the servicer that manages it. Servicers work with borrowers to help manage student loan repayment. If you need to change your repayment plan or apply for forbearance or deferment then you need to discuss your options with the student loan servicer.

You will want to work with your student loan servicer as best you can. Once you start earning money to pay toward your loans you may want to pay off certain loans first, such as the ones with higher interest rates, which can help you save some money on your loan. Contributing more than your scheduled payment can help you save interest.

Contact your servicer to learn how to apply for your additional money. Instead, they may just apply any extra payments and money toward the next month’s bill. You may also be eligible for student loan forgiveness if you work in a certain field for a specific period of time. In order to make sure you are on track to get this benefit, you need to work with your student loan servicer to determine whether the loans are eligible, whether you are in a repayment plan that is qualifying, and whether or not you have properly filled out the forms.

Choosing a Student Loan Servicer

List of federally approved student loan servicersWhile you don’t get to choose a student loan servicer for your federal loans, when you choose a private student loan lender you are also choosing a student loan servicer so it’s important to choose a private student loan lender carefully.

When choosing a private student loan lender, the most important things to look for are fees and interest rates. In order to check this, you may need to do some shopping around. The rates you will find are just like other loans. And will depend on the market interest rate and your credit history. Some lenders require a co-signer, such as relative or parent, who will also shoulder responsibility if you stop making payments. This means that your payment activity impacts their credit score, which is not something you really want to do to the co-signer. When looking at the costs for the private student loan lender, consider the interest, origination fees, early payment fees, and the lender costs.

You Can Not Choose Your Student Loan Servicer for Federal Loans

You, unfortunately, don’t get to choose your loan servicer and are assigned one. If you have student loans from the federal government then your student loan servicer will be assigned by the Department of Education. The servicer’s job is to help you keep your loans in good standing by giving you the resources and support you need. However, you need to know that they are private companies, which means they can offer choices that may not be the best for you. You have to also be your own advocate by knowing your different repayment options and asking questions when dealing with your student loan servicer.

What to Do with Complaints About Student Loan Servicers

Many borrowers feel frustrated with their student loan servicer. Many complaints are in relation to the information that servicers provide and issues about affordability. As comments continue to show some of these issues that borrowers face, there could be some changes in the industry. However, even if there are complaints about your student loan servicer, you will need to go directly to them and work out any issues.

Student Loans Can Be Transferred to a New Servicer

It can be common to see either private or federal student loans transferred to a new servicer at any point, including in the repayment phase. Since the student loan servicer handles the transfer of the account it doesn’t affect your student loan terms. You will usually get electronic or mail notifications that your student loan is now being serviced by a new company. If this happens, you should continue making payments on time to the old servicer as instructed in order to avoid any late or missing payments.

Switching Your Student Loan Servicer

If you have federal loans, you can exit the federal loan system and have a better chance of selecting your student loan servicer when you refinance your loans privately.

What to Do Once You Find Your Student Loan Servicer?

Once you know who your servicer is you should then create an account on their site. In order to do this, you usually need to create a username or password. And then share relevant information, such as your Social Security Number, name, and address. You will also need to secure your account with some security questions. When you have registered, you are able to connect your bank information and then make payments directly. You are also able to send checks but it can be much easier to pay online.

There can also be other benefits to paying online. For example, you may get a reduction in your interest rate if you sign up for automatic payments. If you don’t want to sign up for autopay then see if you are able to sign up for online alerts so you are able to be reminded when a payment is due so you never miss a payment.

How Your Student Loan Servicer Can Help You?

Your student loan servicer can help you with many things once you track them down:

  • update your contact information
  • check your loan status
  • find details on payment amounts
  • help you make your payments

Being proactive about reaching out to your servicer and managing your loans is a good strategy to correct any issues, avoid errors, and help you keep your payments on track.

Forbearance with Your Student Loan Servicer

It is not unusual that you can not pay your student loan. According to some student debt statistics, the total amount of student loan debt in 2020 is over $1.67 trillion. If you are unable to pay your student loans then your loan servicer could suggest forbearance. Forbearance is the option to delay payments and you don’t have to make payments while loans are in forbearance. It sounds pretty great but it may not be the best option. While in forbearance, your loans still accrue interest. The interest is added to your balance once your loans are out of forbearance and you are back to making regular payments.

This means that unless you can cover the interest while your loans are in forbearance, your balance will be higher as you start to enter repayment. Since the interest keeps accruing, forbearance should be only temporary and a short-term solution and not a long-term solution.

Do You Have Federal or Private Student Loan?

Whether or not you can get forbearance from your student loan servicer will depend on whether or not your loans are federal or private. Federal loans will usually offer more generous forbearance terms than private lenders.

Not all forbearance terms are the same and for federal student loans, there are two types. General forbearance can be an option for you if you aren’t able to make payments due to financial difficulties, medical expenses, an employment change, or other reasons. You have to apply for this type and the servicer has the right to deny the application at their discretion. Mandatory forbearance is used in different situations when you are in a residency program or medical internship, an active National Guard Member, or your payment is more than 20% of your monthly gross income. If you qualify for this then the servicer isn’t able to deny the request.

In certain cases, your service provider can actually place loans in forbearance without you filling out a form. For example, forbearance can happen during a natural disaster when you aren’t able to make payments. There are other reasons why your account may be in forbearance.

Don’t Make Decision About Forbearance Too Quickly

While it can seem tempting to jump at the chance to not have payments for a time period, you should look at your situation before you make the decision. Why do you want to delay the payments? Are you looking for a long-term or short-term solution? Could deferment be a better option? If you decide that forbearance is your best option then it helps to make interest-only payments during this time period. The small payments that chip away at the interest will benefit you in the long run. The less interest you get in forbearance, the less your principal will go up when you are done with forbearance. If you are placed in forbearance and you can actually make your payments then cancel your forbearance so you can work toward lowering your principal instead of letting it grow.

Deferment with Your Student Loan Servicer

This can be an option with your student loan servicer. Deferment actually excuses you from making a student loan payment for a certain period of time because of a condition in your life, such as hardship, unemployment, or returning to school. Unlike forbearance during this time, interest doesn’t accrue. You can usually qualify for deferment on a federal student loan if there are specific conditions and criteria for the loan time and you aren’t more than 270 days behind on your loan payments. You can defer student loans for only so long but usually, the maximum is for three years total. In order to apply, you need to send your servicer the right application and the necessary documentation. Your servicer needs to grant you deferment if you qualify but keep making payments until you are officially approved.

There are Different Types of Deferment Depending on Your Needs

  • In-School Deferment: This deferment is when you pause your loan payments while you are enrolled in college at least half time and the six months after you leave school or graduate. If you qualify then you should automatically get this but if you don’t, ask the enrollment office to send the information to the servicer.
  • Unemployment Deferment: In order to qualify for this, you will need to be unemployed and getting unemployment benefits, as well as diligently seeking full-time work. Many borrowers can get up to 26 months of this type of deferment but you will need to apply every six months.
  • Economic Hardship Deferment: You can qualify for economic hardship if you are getting federal or state assistance, such as through Temporary Assistance for Needy Families, or if you are not working full time and earning a monthly income of less than the poverty guidelines for your state or volunteering for the peace corps.
  • Military Deferment: If you are on active military duty then you can postpone payments. Your service needs to be related to a military operation, national emergency, or war in order to qualify. You are able to qualify for this deferment as long as you are on active military duty. You are also able to use it for 13 months after the service ends or you return to school.
  • Cancer Treatment Deferment: Cancer patients that have student loan debt can also get a deferment during treatment and for six months following the conclusion of treatment.
  • Other Types of Deferment: Other private lenders will also let you defer student loans while in the military or school. Be sure to contact the lender for eligibility details and to find out how to apply.

Deferment on Private Student Loan Cost More

If you have private loans then student loan deferment can be expensive. These loans may accrue interest during deferment and you will be responsible for paying it. If you don’t pay this while your loans are in deferment then unpaid interest is added to the loan balance, just like forbearance.

Income-Driven Repayment with Your Student Loan Servicer

If you are worried about affording payments in the long run and deferment or forbearance isn’t an option for you then an income-driven repayment can offer some immediate relief and some other benefits:

  • You Will Likely Pay Less Every Month: Many factors factor into how your payments are calculated. If you are deferring loans because you don’t earn a lot of money then your payments could be as low as $0, which is basically the same as pausing them altogether.
  • You Can Save on Interest: A big benefit of deferment is not paying interest on any subsidized federal loan. However, most income-driven pans also waive the costs if your payments don’t pay for your accrued interest. This will last for three years, which is the same as economic and unemployment hardship deferments.
  • You May Get Loan Forgiveness: After 20 to 25 years of payments, income-driven plans will forgive the remaining balance on your payments. And forgive any remaining balance on your loans. Instead of pausing payments for three years with deferment, you could be paying under an income-driven plan and be closer to forgiveness than with deferment.

It’s possible that you will pay more interest overall on an income-driven repayment plan since these plans extend your repayment term. Use a repayment estimator to calculate short- and long-term costs. Then you can see if this is the right plan for you compared to deferment or forbearance.

Conclusion

Sometimes, with a good interest rate, personal loans can help you to get out of debt. But this is for some other story. While you may not have a choice in your student loan servicer, finding the servicer is an important part of getting your loans repaid. Working with your servicer is going to be in your best interest in order to make sure that you get your loans paid and to find the best repayment plan for your needs, whether it’s forbearance, deferment, or an income-driven repayment plan.

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.

How to Repay Your Student Loan On-Time, Every Time

Low angle view of happy group of six young cheerful graduates in black gowns, throwing up their head wear in the air and celebrating.

Congratulations on your college degree! You worked hard and you deserve it. But guess what? College wasn’t free. Even if you worked your way through your 529 savings, won a few small scholarships and participated in a work-study program, you might have had to take out a loan to bridge the gap. National student debt has soared to $1.4 Trillion. The total amount of money borrowed in mortgages is the only debt that is higher than this.  If you turned the tassel and then had to turn your attention to how much you owe in student loans, this is the guide to help you repay your student loan on-time, every time.

Handy Tips To Repay Your Student Loan On-Time

One tool for building good credit is to repay your student loan on time. The first thing you should do is set up auto payments with your bank. Pay off as much as you can every month. For borrowers who have never financed a car or had a credit card, the student loan is the first debt that will have an impact on credit history. It’s important to make the payments on time because the student loan late payments negatively impact your credit score. Your credit score is the three-digit number that reflects your creditworthiness. It’s the tool that lenders use to determine if you are a good borrowing risk and how high your interest rate will be to borrow.

Questions below will be your guide to make a good plan on how to repay your student loan on time.

When Do I Start Repaying Student Loan Debt?

If you financed your education with a federal student loan you have a grace period of six months after you graduate, drop below half-time enrollment or leave school, to begin paying back the loan. Interest accrues during the grace period and is added to the full amount of the loan. You can make those interest payments if you’d like with no penalty to you.

If your higher education loan is from a private lender, like a bank, you may or may not have a grace period. That will be in the terms of the original loan. The idea of the grace period is to give you a chance to get a job and some financial footing before payments begin. But just because you have a grace period doesn’t mean you have to use it. You can begin chipping away at what you owe if you start to repay your student loans soon as you can.

How Do I Know How Much I Have to Pay?

If you have a federal student loan the government will put it in the hands of a servicer and the servicer will send you a statement detailing what you owe, the amount of each monthly payment and when the payments are due. A private lender will generally do the same thing in a monthly statement that either comes electronically or through the mail.

What are My Repayment Plan Options?

The federal government offers a full menu of options for paying back their student loans. Student loan repayment plans generally fall into two categories – standard repayment plans or income-based repayment plans. The default status is a standard repayment plan, but you can apply to change that at any time during the course of the loan.

Standard Repayment Plans

There are three variations on a standard repayment plan

  • A standard repayment plan is set up for a fixed length of time and the monthly payment due is always the same.
  • A graduated repayment plan has monthly payments that balloon through the life of the loan. This type of loan assumes your income will rise over the years and you can afford a larger payment down the road than you can now.
  • An extended repayment plan stretches the loan out over many years. This lowers the monthly payment that is due but the longer terms and the extra interest that will accrue means that in the end, you have spent significantly more to repay your student loan.

Income-based Repayment Plans

Income-based repayment plans are based on calculations that look at your disposable income and what you can be expected to afford as you repay your student loan. They can be set up for varying lengths of time. These plans tend to be good for borrowers whose incomes are low or their debt-to-income ratio is high.

Why is it Important to Pay On-time?

Fulfilling the terms of the loan is good for your credit score. So is making timely payments over a lengthy amount of time. Both of those things build a credit history. A student loan is installment debt, meaning something that you pay for a fixed amount of time. That’s different from revolving debt, like credit cards, that are open-ended. The three top credit score reporting agencies, Experian, TransUnion, and Equifax, are looking for a mix of installment and revolving debt as a way to build a higher credit score.

Make a Budget

You have to plan to make that student loan payment each month. That’s where your budget comes in handy. A budget allows you to take control of your finances because you can clearly see what is coming in and what is going out. A budget eliminates haphazard payments to obligations that may or may not be made on time. How do you begin to budget?

Your budget can be a simple spreadsheet with rows and columns that allow you to add, subtract and plan. A more visual option is a budgeting app like Mint that allows you to set up a budget and then add bills to a dashboard so that you receive reminders when things are due. Another budgeting app is YNAB, or You Need a Budget, which works on zero-based budgeting, which means it takes into account only the money you absolutely have at that moment.

In its simplest form, a budget provides a snapshot of income versus expenses. So you begin the budgeting process with an honest assessment of income. Then you list your obligations. These include the cost of housing, food, utilities, transportation, insurance, clothing, and personal items. If you need to repay your student loan that goes right here in the obligation column. You should budget to set at least a little money aside for savings and there has to be some space for entertainment and eating out so you don’t feel completely deprived by your monetary obligations.

If you are following your budget you’ll have the money to repay your student loan on-time every month.

Learn How to Decrease Your Expenses

An important part of budgeting is also to track spending. If you haven’t ever laid your budget out in front of you, you might be surprised by what you see. There may be some glaring places to cut expenses. There might be subscriptions to services you no longer need or want. You might find expenses to try and renegotiate like the cost of cable television or your wireless provider. You may decide it’s time to learn how to cook and not pick up so much take-out during the week.

Your list of monthly obligations may include multiple student loans with different lenders and lengths of obligation and payments due at different times of the month. In that situation, you might want to consider consolidating your student loans.

Why Consolidate My Student Loans?

Consolidating student loan debt is one way to organize what’s due and get the monthly obligation paid on time. Consolidating all the debt into one loan gives you a really accurate picture of how much you owe how long it will be until you repay your student loan.

If you have federal student loan debt to consolidate, begin at studentaid.gov, the same place you always filled out your FAFSA, or Free Application for Federal Student Aid each year to determine your aid eligibility. The federal government allows you to consolidate your federal loans into one loan at no fee. Consolidating like this doesn’t change your interest rate, though. It will be based on the interest rates from your original loans.

You can also consolidate loans through a private lender, like a bank. You could choose to consolidate only your existing private loans or combine your private loans and federal loans into one payment. Consolidating like this allows you to compare interest rates, customize the length of the loan, customize the payments on the loan and even select the day of the month when the payment will be due. One word of caution about taking federal loans into a private consolidation program. Once the federal loans are out of the government’s hands you lose access to federal repayment and forgiveness programs.

Should I Refinance My Student Loans?

That’s a good starting question. You can only refinance a single student loan or group of student loans that are already in the hands of a private lender. You can refinance to take advantage of a lower interest rate or to change the terms so that the loan ends either sooner or later than the current payoff date.

If you turn to a private lender to repay your student loan by refinancing, that lender will look into your credit score, credit history, employment status and how well you have already done making payments on your student loan debt. In some cases, a private lender may require a co-signer to guarantee the loan. If you’re looking for a lendre, Loanry has some recommendations for you.

Should I Take Out a New Loan to Pay Off Student Loan?

Going to the bank and taking out a personal loan is one strategy to help you repay your student loan. This is probably only a choice for borrowers with very high credit scores. Otherwise, the interest rate is likely to be higher than the original student loan.

Should I Transfer My Student Loan Debt to a Credit Card?

This is generally not a good idea because the interest rates on credit card balances are usually higher than the rates on loan.

Can Any of My Student Loan Debt Be Forgiven?

Mostly, the federal government is looking for complete and on-time repayment of student loan debt. There is one program – PSLF, or Public Service Loan Forgiveness, that is for employees of the government or employees of non-profits. The lender might forgive the student loan debt after the borrower makes $120 monthly, qualifying payments while working full-time.

Some teachers who spend five complete and consecutive years working in low-income schools may be eligible to have student loan debt discharged.

If your school closes while you are attending or soon after you graduate your debt might be discharged. In the case of a permanent disability or death, they can also remove it.

Can I Pay More Than What’s Due Each Month?

An excellent strategy to help you repay your student loan is to make extra payments whenever possible. Reducing the total amount owed one payment a time can move you toward paying off the loan earlier than the terms.  There is no monetary penalty for paying more than the minimum on your student loan.

Another sound strategy is to make more than one payment a month on student loan debt. Even if you take the regular monthly payment and cut it in half and submit a payment every two weeks you reduce the amount of the loan quicker.

Any time you receive a little windfall of cash, maybe a bonus at work or an income tax refund, consider using it to make an extra payment on your student loan to accelerate the payoff process.

How Will I Remember When the Student Loan Payment is Due?

On-time payments go a long way toward building your credit and finishing your student loan. So it is very important that the lender receives the payments on or before the due date.

Consider some kind of system that will help you remember it’s time to make a payment. Maybe it’s an entry in your digital calendar on the day you should send the payment. Maybe it’s a reminder on your phone. Or maybe you use an app that sends you notifications to remember to repay your student loan.

Another strategy is to sign up to have the loan payment automatically drafted from your bank account when it is due. Sometimes the lender will offer a monetary incentive if you sign up for automatic drafts.

What if I Can’t Make My Payment?

The very first day after you miss a student loan payment the lending institution considers your account past due or delinquent. If you don’t get completely caught up with payments and interest by 90 days, your loan servicer will report your delinquency to credit reporting agencies. If you go further than that, the servicer can say that you defaulted on the loan and will demand complete payment of the entire amount of the loan and interest immediately.

Defaulting on a student loan negatively impacts your credit score and your future ability to borrow money at a reasonable interest rate. Your college or university may refuse to send copies of your transcript if you have defaulted on your loan.

If you are having difficulty making payments contact the loan servicer immediately to try and figure out a way to back on track with a loan repayment schedule.

Conclusion

If you graduate from college with student loan debt it is important to commit to paying the loan in full with on-time payments. Gather up information about your loan or loans and calculate the complete amount you owe, the amount of each payment, the due date of each payment and when you will pay off the debt if you follow the current terms. If the loans are federally-backed student aid you can research repayment options that can change the length of the loans and impact monthly payments. If you have more than one loan you can consider consolidating that debt into a single loan so that there is only one payment each month to remember. You can investigate what kind of interest rate private lenders would give you if you refinanced, and see if you can save money over the length of the student loan that way.

No matter what the payment or payments add up to or when they are due, it is important to commit to paying your educational debt. Your monthly budget should make it a priority to repay your student loan. Set reminders, mark a calendar or automate your monthly payments so that they get to the lender on time, every time. Faithfully paying down your student loan debt will not only build your credit for future purchases, when you get to the very last payment you will feel like you really accomplished something in your personal, financial life.