If you are planing on attending college, chances are you will need some amount of student loans to help fund your education. Since the average college student will have to take out student loans, let’s go over some common mistakes you will want to avoid when considering student loans for college.
5 Things to Avoid When Dealing with Student Loans
1. Applying for student loans before seeking out scholarships and grants you may be eligible for. If you can get money for college that will not have to be repaid, why not do it? Take a look at all of your scholarship, grant and loan alternative opportunities before considering student loans.
2. Applying for private student loans before applying for FAFSA. Private student loans are not regulated the same way federal student loans are, and therefore will typically have higher rates, less flexible terms, and not nearly as many repayment options as federal student loans. When college graduates speak of being in student loan debt with virtually “no way out”, many of them are speaking of private student loan debt. Those with private student loan debt are not eligible for ANY federal student loan relief programs or federal student loan consolidation programs. Max out your federal financial aid before ever considering a private student loan.
3. Not filing a FAFSA at all. A very large misconception is that students think “they will not qualify for federal financial aid”, when in reality the majority of students do qualify for some type of federal financial aid. Not filing a FAFSA is arguably the WORST mistake you can make when it comes to student loans.
4. Obtaining private student loans without the help of a cosigner. This is a big waste of time if you are not a creditworthy borrower. Private student loans are based on credit history, so if you do not have much credit history, or have poor credit history, the majority of private student loan lenders will require a creditworthy cosigner on your loan. Be leery of any lender stating they will lend “bad credit loans”, because as I said above, you will most likely just waste your time applying to find out you are denied.
5. Borrowing more money in private student loans then you actually need. This can be tempting for many college students, since private student loans are not based on need, many have the opportunity to borrow in excess of what their educational expenses actually are… BIG MISTAKE! Remember all the money you borrow in private student loans will have to be paid back with interest. This mistake contributes to how many college graduates find themselves in unmanageable student loan debt.
TheStudentWhoGotScrewed:
is a 27 year old college graduate from the University of Wisconsin-Milwaukee, currently living in the Chicago, IL area. Read all of my posts by clicking here and read my profile by clicking here. Share your student loan experiences, stories and tips with me and other readers by dropping a comment!
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