Tips About Student Loans

Many students find that they must use loans to help pay for a higher education, especially if they’re working on a four-year degree. These tips from KHEAA may help lessen the impact of borrowing.

·         Submit the Free Application for Federal Student Aid (FAFSA). You may not think you’ll qualify for federal aid, but the only way to find out is to try.

·         Find all the sources of financial aid that don’t have to be paid back first — grants, scholarships and work-study — before turning to loans.

·         Borrow only what you need. Remember, you have to repay your loan. If the school’s financial aid package awards you $5,000 in federal loans but you only need $3,000, just borrow the $3,000.

·         Use federal student loans first. You’ll generally have more repayment options when it’s time to start making payments.

·         If you can, pay the interest on unsubsidized Federal Stafford Loans while you’re in school. Otherwise, the interest will be added to your principal and you’ll end up paying more.

·         If you need a private loan, do some research to find the one that best fits your situation. The KHEAA Student Loan Marketplace at www.kheaamarketplace.com can help.

KHEAA is a public, non-profit agency established in 1966 to improve students’ access to college. It provides information about financial aid and financial literacy at no cost to students and parents. KHEAA partners with Overture Technologies to provide the KHEAA Student Loan Marketplace at www.kheaamarketplace.com to help students and parents find the private college loan that best suits their needs. KHEAA also provides the ThinkAhead Net Price Calculator to universities and colleges.

The calculator, available on a school’s website, lets students and parents determine their out-of-pocket costs for attending that school. KHEAA also helps colleges manage their student loan default rates and verify information submitted on the FAFSA.