In about a month's time from now students will be heading to college for the Fall Semester. One thing which will be uppermost in most of their minds is how they are going to pay for college. The vast majority of them will be taking some kind of loan or other. The most important thing is to avoid piling up debt. This can well turn out to be a major burden when you graduate and cause constant stress of falling behind on your payments and building up a bad credit record.
Nowadays student loans are a big and hugely profitable business, what with interest rates climbing all the time. The recent loan scandals have exposed the dirt in the system, that is the advice you get from various counselors may not be the best deal for you. But what is one supposed to do in such a situation.
Experts advise that first of all exhaust your sources of federal funding, whether it be a Perkins, Stafford or a PLUS loan because it caps your interest payments. There are other federal loans as well.
It is possible that this may not take care of your entire needs and you may fall short and may have to find other sources of funding as well. While doing so it pays to have a good hard look at the discounts offered, penalties charged for delayed payments and processing fees charged because in many instances these charges may make a sizable difference to the total cost of the loan including the interest component.
Often students end up taking more than one loan. This can be very burdensome. Consolidating your loan helps not only reduce interest cost but also reduces monthly payments. You also deal with only one lender. At times refinancing your loan may help by increasing the repayment period, but this usually implies a higher rate of interest.
Finally remember to keep your grades up. This improves your chances of scholarship. Also participate in college and community activities. Take advantage of work-study programs. An on-campus job in your field of study is a big bonus.
Have a great time in college!