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Today it is almost impossible for any student to graduate from college without borrowing some money. Don’t let that deter you from getting a college education though! Student loans are considered ‘good loans’. Think of them as an investment that will reap rich rewards in terms of better employability and higher earning potential.
Yes, taking student loans to get an advanced education is definitely worth it. But, only if you make smart borrowing decisions. It all starts with taking steps to avoid borrowing more than you need in student loans.
Here are a few things you can do so you’re borrowing only what you need.
Apply For Scholarships & Grants
Applying for scholarships and grants tops the list of things that you can do to minimize your borrowing. Scholarships are free money. Unlike loans, you don’t have to worry about interest rates, how you are going to pay back the money or how long it will take you to pay it all back. You will have to spend some time and put in the effort to look for and apply to scholarship opportunities that you qualify for. But, it is well worth it.
Submit Your FAFSA
Submitting the FAFSA is mandatory in order to get federal student loans and other forms of financial aid, including work-study programs. The better your financial aid package, the less you will have to borrow through private lenders, which can be very expensive.
Consider Community College
Doing two years of community college and then transferring to a 4-year university can cut down your total cost of education substantially. It is definitely worth considering if you are looking for ways to cut down on the money you borrow towards your college education.
Only Take Certified Loans
Certified loans take away the temptation to borrow more than you need to cover those ‘just in case’ incidentals. When you take a certified loan, your college sets the amount that you can borrow. Your college’s financial office provides the private lender with details regarding the cost of education and your shortfall. The lender sends the necessary funds directly to the school to be used towards your college costs. This ensures that you only borrow what you need and nothing more. It also ensures that you cannot access the money to use for expenses other than those related to your college education.
Consider Your Expected First Year Salary
Some careers pay higher than others. Finding out your potential average annual earnings for the first year will give you a realistic picture of how much you will actually be able to set aside to make your monthly payments, after considering other costs such as rent, utilities, and groceries. If the major you are considering leads to a lower-paying career path, you must give serious thought to how much you are borrowing by way of student loans. If your monthly payments are likely to be higher than your potential earnings you must consider applying to more affordable colleges. Alternatively, consider starting off in community college and then transferring to a 4-year college.
Taking steps to avoid borrowing more than you need is the key to keeping your debt manageable. Implementing all of the tips mentioned above will help keep your borrowing to the absolute minimum.
Use College Raptor’s free Student Loan Finder to compare lenders and interest rates side by side!
| Lender | Rates (APR) | Eligibility | |
|---|---|---|---|
 |
5.50%-16.12%* Variable
3.99%-15.61%* Fixed
|
Undergraduate and Graduate
|
VISIT CITIZENS |
 |
5.54% - 15.70% Variable
3.99% - 15.49% Fixed
|
Undergraduate and Graduate
|
VISIT SALLIE MAE |
 |
4.63% - 17.99% Variable
3.49% - 17.99% Fixed
|
Undergraduate and Graduate
|
VISIT CREDIBLE |
 |
6.00% - 13.75% Variable
3.99% - 13.75% Fixed
|
Undergraduate and Graduate
|
VISIT LENDKEY |
 |
5.66% - 14.72% Variable
3.69% - 14.56% Fixed
|
Undergraduate and Graduate
|
VISIT ASCENT |
 |
3.70% - 8.75% Fixed
|
Undergraduate and Graduate
|
VISIT ISL |
 |
5.62% - 16.85% Variable
3.69% - 16.49% Fixed
|
Undergraduate and Graduate
|
VISIT EARNEST |
 |
5.00% - 14.22% Variable
3.69% - 14.22% Fixed
|
Undergraduate and Graduate
|
VISIT ELFI |
