Applying for Student Loans
News Flash: the most important part of your student loan occurs before you even get the loan. What you do before taking out the loan can have the greatest impact on your life. It can mean the difference between paying back the loan in full to live a financially free life and being in default with mounting anxiety, stress and depression. This immense impact comes down to three main components:
- Your attempt to get as much free financial aid as possible before taking out a loan
- Your extent of knowledge and research on student loans
- Your creation of a repayment plan before you even apply for the loan
Before you borrow money, research and apply for as much free financial aid as possible. Grants and Scholarships are the main categories of free aid. Scholarships are often based on merit, meaning it depends on your academic worthiness or other accomplishments. Grants are often awarded based on financial need. Visit the financial aid website at your prospective university or college, local institutions (such as your credit union), the Federal Student Aid website at www.studentaid.ed.gov , and contact family, friends, and mentors to learn about other free aid opportunities. It is never too early to start researching. Always be aware and keep your grades up because many scholarships are offered based on GPA and performance throughout high school! Also look into a Work Study program, which allows students to work part-time to earn money for their education expenses.
Researching Student Loans
After this, if you find that you still are in need you can research student loans to cover the rest of your cost of attendance. There are multiple federal loan options including Direct Subsidized and Unsubsidized Loans, Direct PLUS Loans, and Federal Perkins Loans. Research the qualifications and decide the best option. For instance, if you can demonstrate enough financial need, you may qualify for a Direct Subsidized Loan where the U.S. Department of Education pays the interest. Also before acquiring the loan, study the repayment plans that are available. For more information, take the Student Loan Webinar that will soon be offered by Christian Credit Counselors at www.christiancreditcounselors.org or visit www.studentaid.ed.gov. If you decide on a private loan, research it thoroughly as well because they may have less repayment options and different terms.
Repaying Your Loan
Finally, make sure that YOU have a vision and plan of how you will repay your loan beforehand. Decide on a repayment plan offered by the loan servicer then calculate your monthly payment and the income you will need to start paying now or after the grace period (depending on the loan). Perhaps you need a part-time job on or off campus to help make payments during school. Even if you do not have to make payments until after graduation, a repayment and income plan could help you make decisions about your academic program and career choice.
In short, applying for as much free financial aid as possible, researching loan options, and creating a repayment plan before acquiring a student loan gives you the best chance to repay it in full and live a student loan-free and stress-free life!
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