The average price of tuition for a public university is $9410 for in-state students and $23,890 for out-of-state students. That doesn’t include all the other expenses that come along with going to college, such as rent, meals, and the cost of textbooks.
Thankfully, there are lots of financing options that will help you get the education you need. If you’re not sure how to get a student loan or which options are the best fit for you, keep reading. Here are some of the primary benefits that come with applying for student loans:
Better Rates. Many student loans have better interest rates than other types of loans. If you were considering taking out a loan and were deciding between a student loan and a personal loan, the student loan is going to be the better option.
Covered Living Expenses. Student loans make it easier for you to cover your living expenses while you’re in college. If you qualified for some financial aid but still need help making ends meet, you can use loans to fill in the gaps as needed.
Peace of Mind. You don’t have to spend all of the money you receive as part of your student loan. You could use some of it as a cushion should you find yourself short on cash. This can give you peace of mind knowing you’ve covered your expenses while getting an education.
Self-Investment. A college education is one of the greatest investments you can make in yourself. Student loans can help you make this investment and provide a better life for yourself and your future family.
Student Loan Options
There are several different types of student loans you may want to consider, including these:
Federal Student Loans. Federal student loans are provided by the federal government and tend to offer better rates and terms than other types of loans. Most students start with these before moving on to private loans.. There are three types:
- Direct Subsidized Loans, which are based on your unique financial needs
- Direct Unsubsidized Loans, which are not based on financial need and don’t require a cosigner (your school will determine how much money you qualify for based on factors like attendance, grades, etc.)
- Direct PLUS Loans, which are credit-based and unsubsidized (they’re usually meant for parents, as well as graduate students)
Private Student Loans. Private student loans may be taken out by the student or their parents. In many cases, parents will co-sign the loan for their child depending on their child’s credit score. Some are also geared toward students who do not have good credit and can’t find anyone to co-sign for them. These loans might have higher-than-average interest rates, but they can be a good option if other loans aren’t available to you.
Choosing the Right Loan for You
If you’re not sure which type of student loan you ought to apply for, these tips will help ensure you’re making the best decision:
Know What You Need. Start by doing the math and figuring out how much money you need. Be realistic about your tuition, fees, textbooks, and other costs associated with getting a college education.
Start with the FAFSA. Next, fill out the FAFSA (Free Application for Federal Student Aid). The information you provide when filling out this online form will determine how much federal aid, if any, you’re eligible for. This includes grants and federal student loans.
Research and Compare Your Options. Once you know what’s available to you, start researching your different loan options. Look at both federal and private loans when making your comparisons. Pay attention to things like interest rates and loan repayment terms. Keep track of when payments are due, too.
The Application Process
Every application will vary slightly, so pay careful attention to the instructions to ensure you don’t miss anything. Make sure you also have information about your income, including past tax returns. If someone is co-signing your loan, you’ll need their information as well.
Tips for Responsible Borrowing
You probably know someone who feels as though they’re drowning in student loan debt. You can avoid finding yourself in a tough position like this later on, after you’ve finished your studies, by taking steps now to be a responsible borrower.
Whether you’re applying for federal student loans or student loans for bad credit, keep these tips in mind:
- Only borrow what you need
- Live like a student and keep your day-to-day expenses low
- Use a co-signer if possible to lower your interest rate
- Start making payments while you’re still in school
This last tip is especially helpful. You might not be able to pay off your entire loan while you’re a full-time student, but you can at least pay the interest and shorten the lifespan of the loan.
Now that you know more about how to get a student loan, it’s time to start filling out applications. Keep the information explained above in mind so you can find the best student loan options for your specific needs.
Photo Credit: stock photo