The college application process is both exciting and overwhelming. When choosing which schools you want to apply to, you have a lot to take into consideration: do you want to stay close to home, or try somewhere new? Are you looking for a specific education program? Do you want a large campus, or a smaller one?
These are important considerations you take into account when deciding where you want to go to school. However, most notably you have to ask yourself: how much am I able to afford for college?
Determining how much money you are able to pay to go to school doesn’t start and end with tuition. You have to consider the cost of books, living on or off-campus, traveling to and from school, and much more. Taking all the different costs that factor into your overall experience into account can add up quickly. This is why many people turn to student loans to help them pay for their college tuition.
Student Loans – The Basics
When deciding if student loans are right for you, it’s best to first understand what a student loan implies. When applying for schools, you have the opportunity to apply for federal aid. By borrowing loans through federal aid, you are able to apply your loan amount to your tuition and campus living expenses, with the agreement that you will pay your loan back with interest.
There are four types of student loans you may be qualified for: Direct Subsidized Loans, Direct Unsubsidized Loans, Direct PLUS Loans, and Direct Consolidation loans. Each of these loan options varies by who they are eligible to, and whether or not financial need factors into the loan amount. If you are an undergraduate student, you can borrow between $5,500 to $12,500 per year with Direct Subsidized and Direct Unsubsidized loans. As a graduate or professional student, you can borrow up to $20,500 with Direct Unsubsidized loans. Direct PLUS loans can be used for the remainder of your costs, and Direct Consolidation loans simply consolidate all your loans into a singular loan.
In the event federal student loan options do not fully cover your needs, you may also qualify for state financial aid. The loan options and eligibility qualifications vary widely by state, so it is encouraged to look into these options thoroughly to see which you may apply to and the unique interest and lending details. It’s important to note you only qualify for state loans in the state you currently reside in, not in the states you are applying to school.
Additionally, you are also able to apply for private loans. Private loans typically have high-interest rates and require a cosigner with a good credit score to receive the loan. Try to exhaust your federal and state loan options before you consider a private loan to reduce your overall interest payments when it comes time to repay your student loans.
Other Ways to Pay
Now that you understand the types of loan options available to you, you can start to consider whether or not student loans are right for you. First, you will have to consider how much money you have available to pay for school. You or your family may have been accumulating college savings throughout your life to pay towards your school tuition. Take a look at the schools you are applying to and compare tuition rates, and if you plan to live on campus, housing rates. This will give you a good idea of your starting point for financing school, and how much you can expect to pay depending on your school choice.
As you narrow down the list of schools you plan on applying to, research their merit scholarships and see how your academic records stack up. Many schools take your SAT or ACT schools into deep consideration when extending a merit scholarship offer. Additionally, they may also take your previous grades and academic performance into account. This information is typically readily available on the college or university’s website, however, you can also contact an admissions counselor at the school to find out more information and see how you compare. This will help you estimate whether or not you will receive any merit-based scholarships.
Next, you will want to do research into any independent scholarships you may qualify for. There are scholarships for anything and everything – you just have to do your research to find the right ones for you. When you are researching, consider both small and large scholarships. Applying for small scholarships may feel like a waste of time, but any amount of money can make a significant difference in your school payments. Even a $250 scholarship, for example, can pay for a few textbooks. After you’ve picked out potential scholarships, put your best foot forward in your applications and ensure you meet all necessary deadlines and requirements to maximize your chances of receiving them.
Should You Take Out Loans?
After you’ve sent out your applications, apply for your scholarships and begin to hear back from schools, you will then have the opportunity to decide if student loans make the most sense for you. When evaluating different acceptances, compare and contrast merit-scholarship amounts to see how much you can expect to pay out of pocket for each school. While you may not always make your decision based on which school gave you the most money in merit scholarships, it is a strong thing to consider as you choose your school.
After you’ve narrowed down your available options and have seen what you will receive from each school, you will be able to see how loans will play their part. Consider all of your available options, including your scholarships and money saved, as you make this decision.
In the end, this decision is completely up to you. You will want to consider your current financial status, and what you think you will be comfortable paying in the long run after you’ve finished school. Student loan payments often become a significant part of your adult life, and you will want to be prepared for the terms and conditions of your repayment period. When deciding on your loan amount, try to borrow only what you need. While it may sound appealing to have more of your tuition and expenses paid off through loans rather than out of pocket, you will have more to pay off from interest in the long run.
Remember this decision is unique to you and your future as a student. Be sure to consider all your available options as you make this decision, and do what makes the most sense for you.
