Before You Take Out Student Loans Read This

College is expensive and finding the funds to get you through the first four years can be exceptionally challenging. But before you take out student loans read this.

First of all, not all banking institutions and loan providers are on the up and up. Many will tell you what they think you need to hear in order to guarantee that you choose their products over the competitors. Research these entities with as much thoroughness as you would a scholarship opportunity.

Given the rollercoaster ride our economy is on, many banks are closing or selling their branches. Terence McCarthy St. Pete announced just such a situation with First Bank. Be sure the banking entity you are considering has some firm and documented longevity behind it. But there’s more to choosing a loan provider and hopefully the following piece will help you make an informed decision.

Before You Take Out Student Loans Read This

Essential Information About Student Loans

While the job market might look promising for those who are current graduates, walking out of college with tons of debt is certainly not ideal. Since the average debt for today’s graduates is nearing $40,000 students looking to enter college need this essential information about student loans:

  • Save money with direct debit. Making automatic student loan payments will make the process convenient. And, over time, you’ll save about .25% interest off the rate you are offered.
  • Consolidation makes life easier. When you bundle those hefty payments into one loan it’s easier to manage making them. Plus, you could be able to lock in at a lower interest rate than what your initial loans provide. And, there are a number of repayment options, some of which are based on income.
  • Loan forgiveness could be included in your job. Those students who are seeking to enter the field of public service can see their loans wiped clean after 10 years of on time payments and continued employ in that field. It’s a great reason to become a teacher or work for a non-profit organization. Learn more.
  • Payments don’t have to start the day you walk across the stage. There’s a six-month grace period before you have to start paying the loans back. And, there are other loans that offer even larger repayment gaps.
  • Get a tax break. While having to pay back student loans isn’t the ideal situation, it is a reality. At least there is the potential to deduct the interest you pay on these loans from your income taxes.
  • Going into default is a bad idea. Default means that you fail to pay your loans back. And, it comes with some very serious consequences which can include wage and tax refund garnishment. Add to that the fact that companies will sell your unpaid loans and you’ll rack in the exorbitant interest rates these servicers tack on to your already unmanageable debt.
  • There are options if you can’t pay. Federal student loans offer a variety of payment options should you discover that you are unable to pay them. Job loss could qualify you for forbearance, which will temporarily halt the payment requirement until you can find another job. The interest will continue to accrue but at least you won’t be in default.
  • Private loans and federal loans are very different. Private loans are a lot more stringent and are not eligible for the public service loan forgiveness program we mentioned earlier. Click this to better understand the differences.

We know that you might need to take out student loans to afford college. But, don’t do it until you are certain you grasp all the ramifications listed here. If you need more advice, this is a great resource.

Want to be a Plumber? There’s Financial Aid for You Too

When most people think of scholarships, grants, and other forms of financial aid, they tend to assume that those can only be used in more traditional educational programs. In fact, you can find options for a variety of subject, including many skilled trades. If you are interested in doing anything from home plumbing repair to concrete septic tank maintenance, consider these options to help make paying for classes easier.

Federal Programs

Some technical and trade schools are able to accept all forms of federal financial aid. This includes a variety of grants, such as the Pell Grant, as well as federally-backed student loans. Potential students much complete the Free Application for Federal Student Aid (FAFSA) and have the results submitted to an eligible school. From that point, you will be able to work with financial aid personnel to discuss any options that may be available.

Want to be a Plumber? There’s Financial Aid for You Too

However, if your choice of school does not accept federal financial aid options, there are still other opportunities available.

Institutional Scholarships

Some educational institutions offer their own scholarships to eligible students. Eligibility may be based on need as well as past performance in school. These scholarships are only available to students attending courses in that school, making the pool of applicants much smaller than some other options. Generally, an application for the program must be completed to be considered, but financial aid professionals in the school will be able to assist.

External Scholarships

Scholarships are also offered through numerous organizations that allow the funds to be used at any school chosen by the recipient of the award. Some may be available through trade organizations, like the Nexstar Legacy Foundation, as well as through certain unions, corporations, or charities. Eligibility requires can vary greatly from one source to the next, so it is important to review all requirements prior to applying.

Private Student Loans

Private student loans may also be an option for students at certain schools. Unlike federal student loans, these are provided by traditional banks and financial institutions. Your ability to obtain a private student loan will depend on multiple factors, which can include your current income and credit score. These don’t offer the same benefits as student loans, but can be a viable option for those who need funds.

Payment Plans

A school may choose to offer a student payment plan options to make the cost of courses more affordable over the long-term. Commonly, this involves making payments at regular intervals as required by the institution. For students who are currently employed, and intend to remain so as they attend classes, this can help lessen the financial strain when compared to paying for all costs upfront. While traditional interest may not be charged, it is not uncommon for payment plans to involve higher costs than paying for your classes outright. In that regard, it is best to compare the payment plan to other financing options that may be available to determine which option is most cost effective.

Cash or Credit Cards

When it comes to paying tuition, many people forget that you can actually pay in cash for your classes. Some educational institutions also have the ability to accept credit cards as forms of payment. To see which payment formats are accepted, such as checks, debit cards, or credit cards, contact the school directly.