With the high cost of a college education, most students end up taking out some type of loan in order to help pay the bills. However, this leaves many people with a debt load that is higher than they can really afford, although the rules are changing to help limit this occurrence. Taking a few things into consideration before taking out Student Loans will help you make better choices regarding loans.
Limit Total Loan Amount
While it’s often possible to cover up to 30 percent of the cost of a college education with loans, this isn’t usually advisable. Taking out too much in loans will make it hard to repay the loans in a timely manner and will make it harder to pay for the other essentials of living on your own after finishing school. Try to limit the total amount of Student Loans for the degree to no more than the amount you expect to make in salary the first year out of school.
Look for Scholarships
It isn’t easy to find scholarships for everyone, but if there are any that are suitable, make sure to apply for them. This type of free money will help limit the total amount in loans necessary. Start looking early with the understanding that only about 12 percent of students have scholarships, and these scholarships tend to be relatively small in most cases.
Prioritize Federal Loans
Don’t even consider taking out any private loans unless you’ve already taken out the maximum in federal loans available. Federal loans have a lot more protections built into them, including the possibility of deferment, better options for repayment and fixed rates instead of variable rates. These loans usually don’t require repayment to start until 6 months after finishing school, which means that there’s more time to find a job that will help make the payments affordable. Parents don’t need to cosign, which is often the case with private loans.
Career Choice Considerations
Those looking to begin careers in public service may be able to get loan forgiveness or have their repayment plan be based on their current income, but this requires staying in this career and making the payments for about 10 years in most cases.
Contact Pearl Hawaii Federal Credit Union for more information about the available loans for attending the college or university of your choice. You can connect with them on Facebook for more updates!