Student Loan Debt

Student loan debt may not be something you are thinking of as a freshman, especially when it impacts you 2, 4, or more years from now. You may even hear about student loans right now from teachers or family members and still think that you don’t have to think about that right now and you’ll put it off until next year or the year after that.

As a recent college graduate, I’m here to tell you that it’s never too early to think about student loans, scholarships and grants. In fact, I wish I had thought more about these things earlier. The good news for you is that it is not too late to investigate your options.

FAFSA-

This is the Free Application for Federal Student Aid. If you have not already filled this out, then you should! The FAFSA will determine what type of aid you qualify for, and not just loans. It also determines your eligibility for grants and Federal Work Study. January, February and March are important months for filing the FAFSA as you can get more funds the earlier you apply. Also, it is important to look on the FAFSA website at deadlines- there are certain deadlines for the state you are in and your college may have a certain deadline as well. The application and information about deadlines can be found at https://fafsa.ed.gov/

Grants and Scholarships-

Grants and scholarships are the most important funding options for college. Grants and scholarships are free money that is given to you to attend college. It may depend on you and your family’s income or your academics, it varies depending on what type of grant or scholarship you are applying for. For example, the Pell Grant (the FAFSA determines if you are eligible for this) is awarded to you depending on your financial need.

Loans-

There are many options for loans- there are private loans, parent loans, Federal subsidized and unsubsidized loans. When you take out a loan, it should be the last option after you have searched and applied for grants and scholarships. Let’s recap- grants and scholarships are free money. Loans, on the other hand you have to pay back. With interest. Which means you’re paying back a lot more money to whatever bank is handling your student loan than what it cost you to go to college in the first place! When you take out a student loan, you have the option to pay while you are in college. If you have the income to be able to do this, it is a smart option as it will cut down on the amount of money you have to pay back after college as well as how many years you have to pay on the loan. Each loan varies depending on your and your family’s income and the interest rates of the banks as to the amount you have to pay and for how many years. Loans are a confusing territory to navigate, especially when you have so much on your plate as a freshman (or even as a senior!). There are great resources in your college Financial Aid office to help you understand what you are getting into when you take out loans. The points I cannot stress enough are always ask questions- there is no such thing as a dumb question, especially when it involves your finances. Also, know exactly what you are getting into when you take out a loan- know how much you have to pay back and for how long. Most importantly, don’t take more than you need. Again, taking out a loan should be your last resort- look for the free money with scholarships first. Scholarships may take more work because you may have to write an essay but years from now, you will be glad you did!