Unfortunately, those in the U.S. who don’t have wealthy parents willing to shell out for their education have to resort to taking out loans. Statistics show that roughly two-thirds of all college graduates entered the workforce with some kind of debt related to student loans during 2007-2008.
While there are some people who are eligible for more aid than others, there are a few things that you need to keep in mind before applying for student loans. Here are the most important aspects of the process that should be taken into deep consideration prior to filling out your loan application:
Keep track of how much you’re actually borrowing, as well as what type of loan you are applying for… Part of the consideration that needs to be taken is to think about how loans will affect your future financial life, and how much you can afford to repay, especially right after graduating. Don’t borrow more than you need, and remember that it is crucial that your student loan repayments should take up a very small percentage of your salary. It’s best to view all of this information in one place, and there is a multitude of resources that can provide you with the ability to do that. Students can generally qualify for more than one type of loan, and therefore, it’s crucial to know at least the major features of each type of loan that you end up applying for. Knowing exactly what kind of debt you are eligible for can make the process a significantly easier.
Research starting salaries in your field. In order to get a rough idea as to how much you can expect to earn after graduation, ask an advisor at your school. You can also use the U.S. Department of Labor’s Occupational Outlook Handbook to approximate what your salary will be, based on salaries for different careers. In addition, there are many tools you can use to estimate your salary. If your major was in English or one of the fine arts, chances are that you may not be able to find a steady job after graduation, or if you do, it might not pay very well. The best thing you can do is research, and then find out what other people in your place are doing, so that you can find a good enough job to pay back your loans on time.
Understand the terms of your loan and keep copies of documents related to it. When you sign the promissory note, you are agreeing to repay the loan in accordance to the terms of the note, even if you didn’t finish your entire education, have trouble finding a job afterwards, or if you didn’t like the degree that you completed.
Make payments on time. The full amount is required to be paid, as mentioned by your repayment plan. Partial payments don’t count towards this commitment of repaying your student loan on time. So, be as informed as possible, so that you not only are aware of the financial aspect of taking out a student loan, but also how to pay it back in the most efficient manner.
Know how much you are willing to borrow. Too many students graduate with a ridiculous amount of student loans debt. Choose a specific amount you are willing to take out in loans, and then search for other sources of funding for the difference. For example, joining the military for a term, and using the funds from your enlistment bonus and other monies from the military in order to pay for university, can significantly reduce the amount of money needed to borrow. Working part-time during the school year, as well as in the summer, can also help with the expenses. Plus, you’ll be able to add the job to your CV.
Remember, to invest wisely, as education and student loans are huge investments for you and your future.