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Written by Eric Horvath

Student Loan Guide By Eric Horvath     Unless you're planning on creating your own school, you'll be paying quite a bit of money for college, and that's okay.  In fact, over two-thirds of American college students receive some kind of financial aid during their college careers.  Grants and most scholarships, which don't need to be repaid, are obviously the best way to go.  In addition, help from parents, part time jobs and massive trust funds are there to cushion the financial fall.  If a gap still remains, (face it, we're not all Hiltons) student loans are the popular way to narrow it.      The first step is acceptance.  Sure, the most money you borrowed before this was that 10 bucks your buddy spotted you for beer.  Student loans are bigger than beer (although not nearly as delicious).  They should be viewed as an investment in your future.  How much of an investment?  According to recent reports from College Board, a leader in tracking and ranking colleges, those with college degrees make 60% more (close to $1 million) in salary over their lifetimes than their counterparts with just high school diplomas.  In a way, they're the gift that keeps on giving!     Not so fast.  Its not as easy as leaving a bank with a bag full of money for school.  There are certain loans and companies you should look for, and offers to stay away from as well.  College Living has compiled these handy tips for student loans.  Trust us…we've been in college for a looooong time.  Before College:     There are ways to save before you even take your first class in college.  1.    Course credits in high school are usually much cheaper than they normally would be.  This may make you look like a nerd in high school, but you'll be saving serious duckets in college. 2.    When you get to school, see your financial aid office immediately.  Working in concert with them will ensure you start off on the right financial foot.  3.    File!  FAFSA (Federal Application For Student Aid) is the keystone for all student loans.  This allows the state and federal governments to determine your loan eligibility. 4.     File Early!   The earlier you file your FAFSA, the better.  Some schools give preference (more money!) to students who file before certain deadlines.  5.    File Online!  Aside from saving trees from using less paper, filing online will allow you to track your application status easier and fix mistakes. Over 6 millions applications are filed online each year.  6.    Ask about scholarships and grants, which would defer the need for loans.  The more grants and scholarships, the smaller the loan.  Smaller loans=less to pay back! 7.    Seriously consider where you live.  Off campus housing vs. dorms is a big indicator for both grants and student loan eligibility.  8.    When filing, make sure you have complete tax information for your parents and you.  Nothing will snag your application faster than being short on info.  9.     Make sure Mom and Dad don't want to pay.  Seriously.  Turn them upside down and shake them for change one last time. 10. Ask! Ask! Ask questions!  There are thousands of available funding options out there, but people don't just throw money away.  You have to seek it out.  While You're In School:        Welcome to the meat-and-potatoes of Student Loans.  Now that you're FAFSA is complete and you've contacted your financial aid office, you can decide which way to go. 11. Federal Loans are the safest and usually cheapest type of loan.  Also, they're regulated directly by the federal government.  Types of federal student loans include: Subsidized vs. Unsubsidized 12. Subsidized loans require proof of financial need.  The good thing is, the government pays interest on these loans while you're in school.  13. Subsidized loans also require at least half-time enrollment for interest payments to work.  So much for taking just a one credit gym class! 14. Unsubsidized loans are available regardless of financial need.  Of course, students must pay all interest accrued during school.  15. Federal PLUS loans are unsubsidized loans offered to parents.  Interest on these loans, which are usually offered after standard subsidized and unsubsidized, must be paid by the parents. 16.  Loans must be paid back beginning at least 6 months after graduation.  This is the standard grace period, unless… 17. You decide to defer payment.  These terms are contingent on demonstrated financial hardship, unemployment or illness.  What if you don't repay at all? 18. The Department of Education could demand repayment of the total loan amount, immediately.  This usually if no payment is made for 270 days.  19. The Department will attempt to collect the debt, charging you with any collection fees, on top of the loan amount. 20. If this happens, you are considered in 'default' of the loan.  This default is reported to national credit bureaus, making it very tough to make purchases (car, house) later on.  21. You will be rendered ineligible for Title IV student aid (continuing education). 22. You will be ineligible for further deferments.  23. The IRS could hold your tax refund, and your wages could be garnished. In short, pay back your loans! How much can you borrow? This depends on your status as a dependant, or independent student and your grade level.  24. Independent students get more cash because of their independence (i.e. not being dependant on parents).  You must prove legitimately you are independent of your parents, and there are age requirements.  Direct Loans: where the Department of Education is the lender Federal Family Education Loans (FFEL), where private lenders make loans backed by the federal government.  Federal Perkins Loans

 

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