Student Loans: Factors To Consider – OnlineBusinessDegree.org
Take Charge America, a non-profit credit counseling agency, understands the significance and impact of the student debt dilemma.
“Many young adults don’t realize the long-term financial impact that student loans can have until it’s too late,” said Mike Sullivan, director of education for Take Charge America. “A careful evaluation of your options and career goals while you’re still in school can prevent a lot of financial troubles down the road.”
In an effort to address these issues, Sullivan suggests students consider the following questions before applying for a student loan:
- What career are you planning to pursue? Take future salary and ability to pay off the loan into consideration. A profession with limited earning potential might make for difficulty in repaying a big loan, so it wouldn’t be a financially sound decision to take out a big loan.
- Do you plan to attend a private university, state school or community college? How affordable is your education? Just because you have your heart set on an attending a private university, does not mean you shouldn’t first evaluate the benefits, costs, and other options. Realistically, you might have a change of heart.
- Have you applied for scholarships or grants? As a general rule, utilize all free monies – scholarships and grants – before applying for loans. School counselors and financial aid offices can provide resources for students, as well as scholarship databases online.
- Have you completed a FAFSA? Submitting the Free Application for Financial Student Assistance (FAFSA) should be done by anyone planning to attend college. Often times, people are surprised to learn they are eligible for funding, even if their family is not considered “low income.”
- Have you researched your federal loan options? Federal loans offer fixed interest rates, flexible terms, and borrower protections that often times aren’t available with private loans. Perkins and Stafford loans are typically your best bet. Graduate students and parents of undergrads can apply for a Federal PLUS.
- Have you done your homework on private funding? It’s best to research the best private loans for your specific financial situation if you have to use private lending. Factors to consider include: interest rate before and after graduation, loan fees, terms, due date for first payment and monthly payment amount.
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