College may be starting for you in the fall or maybe starting for your child, and one of the things that you should be considering right now is what you need to know about student finance. If you're shopping around for student loans right now, then you know that it's quite exhausting to get through the list of scholarships, fellowships, grants, and loans that are available to Americans who are looking to seek higher education.
Loans are not the same as fellowships and scholarships, however, because loans are something you do have to pay back. Finding the right financing for your education or for the education of your child is important, and you need to do it as early as you can so that they are ready to start the next semester. Companies such as the Higher Education Servicing Corporation can help you to find the right student finance options, but you need to make sure that you have exhausted your search yourself first. Here are some of the things that you need to know before you go ahead and get your first student loan.
Go federal before you go private. There are two main types of student loans: federal and private. Federal loans are received by submitting the Free Application for Student Aid and are often the best choice because you don't need to have a specific credit history to qualify for the loan. Federal loans can also be subsidized or unsubsidised, and they don't accrue interest when they are subsidized. You may qualify for a subsidized loan if you demonstrate financial need.
Only borrow what you need. Undergraduate students are going to be in swathes of debt before they've even graduated from school. You can borrow up to 57,500 in federal student loans, so check what you're looking to study against what the tuition fees are. You also have to remember that you have to factor in tuition, fees, room, board, books, transportation, and personal expenses. Of course, if you're planning on spending time at your parents house, you won't need to worry about the accommodation side of things, but you do still need to do what you can to maximize your education.
There will be interest you have to pay on the loan. Regardless of where you borrow from. There will be interest that you have to manage. You're always going to own more than the amount you borrowed, and that's because of interest which starts to accrue daily on your loan and will be added to the total amount that you owe. It may not be fair, but it's one of the horrible realities of adulthood.
Ask your school for help. Your loan will be paid out to the school after you sign your master promissory note agreeing to repay it. They'll begin to apply the loan to tuition, fees and room and board - that’s if you live on campus. They'll give you back the remainder as a reimbursement. You can expect to receive your reward money every term or at least twice within an academic year.
