The most costly mistake you can make is not considering all your options.
- Don't just apply for financial aid through your school and government-lending programs. Do as much research as possible and apply for all the free money you can! Anything you get will reduce your out-of-pocket expenses.
- More than likely, your financial aid packages include offers of student loans to help cover costs. Be advised that you don't have to borrow the entire amount that's offered to you. You can choose to have the amount reduced, or decline the loan altogether.
- Figure out a budget before you borrow.
A smart borrower is an informed borrower. Read up before you sign anything!
- If you decide to borrow money, remember that there are different types of education loans. Confirm the interest rate, loan fees, and repayment schedules of each loan so you can make an informed decision about what you think you'll be able to live with.
- Student loans, particularly federally backed loans, are offered by a wide variety of lenders. Your school may have a list of preferred lenders or you may choose to find one on your own. However you go about deciding, there are two criteria that should guide your decision: borrower-benefit programs and customer service.
- Borrower-benefit programs help reduce the cost of repaying your loan. For example, the lender may reduce your interest rate after you've made a required number of payments on time. Keep an eye out for good deals.
It may seem like it's a long way off, but keeping the end in mind at the beginning could affect how much you ultimately pay.
- Some of the loans you're offered will accrue interest while you’re in school. Consider paying the interest while you're attending school to reduce the payments that will be due after you graduate.
- Avoid credit card debt, avoid credit card debt, and avoid credit card debt! Adhere to the old adage, "if you can’t pay cash for it, you can’t afford it."
Student loans are a long-term commitment. Make sure you manage them by not letting them manage you.