Student loans can be wonderful in the short term and costly in the long term. Here are suggestions to consider before you sign up.
• Make use of the free services of high school counselors, college financial aid officers, and calculators on government and other financial planning web sites to understand your options, the costs, and the responsibilities.
• Add up expected expenses for tuition, textbooks, housing, food, and transportation, and calculate the minimum you need to borrow to avoid struggling with future debt. Reduce your borrowing requirements by exploring options such as scholarships and other non-loan funding sources.
• Once you have an idea of the total amount you plan to borrow, check with lenders to find out repayment options, interest rates, and early pre-payment penalty fees.
• Use those figures to estimate how much money you’ll need each month to repay the loan. Compare that to your potential monthly income after graduation.
• Work out a budget so you can avoid penalties and protect your credit rating by making payments on time.
Learning how to fund your education can be an education in itself. And, like your education, the skills you learn can be put to use throughout your life.