Your Student Loan and You

No one should have to wait until the last minute to find out what their options are when it comes to student loan consolidation. Finance options and private student loan consolidation are topics which should be dealt with while a student is still in school. Putting off decisions that go along with these responsibilities will only spell out trouble in the future. Unfortunately, it happens all too often that young high school graduates head off to college with stars in their eyes and big dreams in their heads, and not enough common sense to understand the process of debt repayment. While some students take out loans in addition to the money given to them by their parents, many students rely solely on loans to put themselves through school. As students forge their way down career paths, parents will no longer be able to help them with student loan debt. Former students must now balance their student loans with other bills that must be paid: rent, utilities, and car payments.

Everyone can plan their own career, but not everyone will be able to fulfill those dreams and career goals. Because no one can see into the future, it’s important to think about financial plans while students are filling out loan application paperwork (which is mostly done online these days). For most students, federal loans will be the simplest option. FAFSA, the student loan program in the United States, serves students and offers a certain amount of money, based on the state a student lives in and how much college costs there. Degree program costs can vary quite a bit, and the system takes this fact into consideration when handing out money. FAFSA also factors in what parents are expected to pay, according to what parents make each year.

These federal loans provide students with the lowest interest rates, but often they are not enough to cover all college expenses, which can add up. Federal student loans tend to cover only the costs of tuition and books. Other living expenses such as rent, food and utilities are not considered by FAFSA unless the student seems likely to be unable to pay for such things on their own behalf. Additional grants may be given for things like student housing.

Private student loans exist for those students who find themselves in need of more money. These loans are often given to students by non-government associations, such as banks or private lenders. Many states offer private loans for students as well. These come at higher interest rates, however, and should be avoided if at all possible. While a federal loan will allow students to pay back the loan on their own time, private lenders tend to be much less patient with students. Often students must begin paying repaying loans from private lenders almost as soon as they have completed their degree, whether they have earned the promise of a job or not.

Before taking out student loans, students should carefully think about each loan they receive. They should perform research surrounding the loans so that they understand what they are getting themselves into later.