Now that the end of the school year is upon us, it’s time for high school graduates to get serious about student loans. It can be hard to think of after college life before college life even begins, but it can be helpful in the long run. Here are some things high school grads should know about student loans.
- Go Federal. Once all college scholarships and grant options are exhausted, it’s time to consider a federal loan. Federal student loans are better than private student loans because they usually have lower interest rates and better benefits overall.
- Consider the Interest. Speaking of interest, it is not your friend. However, all student loans come with it. That means it’s extremely important to get the best rate possible and — when it comes time to pay off the loan — to never fall behind on payments. Interest can add up quickly and make paying off your loans difficult.
- Find Your Total. When you apply for a federal loan, you will eventually receive a letter of approval that lists the maximum you can borrow. Do the math before simply accepting this number. You don’t need to borrow the maximum — you can borrow less if it fits your needs. Plus, borrowing less means the debt will be easier to pay off down the road.
- Repay Early. One good tip for paying down student loans? Start while you’re in college if you can. Contact the loan servicer to see how you can make payments on the loan’s interest while still in school. That way, when you graduate, you already have a solid head start.