Generally speaking as college students, as they prepare to face tuition cost higher than ever before, should investigate and take as much money from federal grants and loans before they look into private loans. These two sources of funding can both get you through school and both have severe penalties in store for anyone with defaulted student loans, but they also have large degrees of difference that need to be considered and weighted.
Experts recommend, after any public or private grants and scholarships are deducted from the total educational price, that students should max out the Stafford Loan Plus—taking advantage of its low fixed rate and options for student loan relief such as deferment, forbearance, and forgiveness in special circumstances. This process should be done beginning with a filing of the FAFSA (Free application for Federal Student aid) that is as complete as possible, as special benefits may be available to those in particular circumstances (and many of these benefits go largely unclaimed every year).
Yet, when one looks at the rapid expansion of college costs, it is not surprising to consider that private student loan volume in the US is increasing much more rapidly than Federal Student Loan Volume (25% vs. 8%. IF you are contemplating private student loans make sure to look careful at their terms and conditions and to understand the schedule for paying student loans and what it will cost you every month to do so. Also be aware of fees and the cost that they can incur. As a general rule of thumb consider every 4% of the total cost in fees to be equivalent to a 1% jump in interest rate.
And if your loans, whether federal or private, get out of control consider Direct Student Aid as your new option to pay back your loans and get your debt under control. Call today.
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