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Feb
09

Student Loans: What Every Student Should Know

Student Loans: What Every Student Should Know

Student Loans: What Every Student Should Know

Incurring student loan debt is something that should never be done lightly or without careful consideration, but that often is. Countless individuals who failed to research the subject in advance have found themselves in dire straits down the road. Fortunately, the information below is intended to provide a great foundation of knowledge to help any student borrow wisely.

If you have trouble repaying your loan, try and keep a clear head. Many people have issues crop up unexpectedly, such as losing a job or a health problem. Most loans will give you options such as forbearance and deferments. Interest continues to compound, however, so a good strategy is to make interest only payments that will prevent your balance from getting bigger.

Consider using your field of work as a means of having your loans forgiven. A number of nonprofit professions have the federal benefit of student loan forgiveness after a certain number of years served in the field. Many states also have more local programs. The pay might be less in these fields, but the freedom from student loan payments makes up for that in many cases.

To minimize your student loan debt, start out by applying for grants and stipends that connect to on-campus work. Those funds do not ever have to be paid back, and they never accrue interest. If you get too much debt, you will be handcuffed by them well into your post-graduate professional career.

To keep the principal on your student loans as low as possible, get your books as cheaply as possible. This means buying them used or looking for online versions. In situations where professors make you buy course reading books or their own texts, look on campus message boards for available books.

To keep your student loan load low, find housing that is as reasonable as possible. While dormitory rooms are convenient, they are often more costly than apartments near campus. The more money you have to borrow, the more your principal will be — and the more you will have to pay out over the life of the loan.

When calculating how much you can afford to pay on your loans each month, consider your annual income. If your starting salary exceeds your total student loan debt at graduation, aim to repay your loans within 10 years. If your loan debt is greater than your salary, consider an extended repayment option of 10 to 20 years.

To keep your overall student loan principal low, complete your first two years of school at a community college before transferring to a four-year institution. The tuition is significantly lower your first two years, and your degree will be just as valid as everyone else’s when you graduate from the larger university.

Taking out student loans without sufficient understanding of the process is a very risky proposition indeed. Every prospective borrower owes it to themselves and their future mates and families to learn everything they can about the right types of loans to get and those to avoid. The tips provided above will serve as a handy reference for all.

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