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Student Loan Advice



Financial Aid Student Loans

5 minute read


Many students dive into financial planning for college the summer after they graduate from high school. At this point, they’ve decided on a college to attend in the fall, and they’ve received their financial aid award letters. This is a critical time, as many students discover their financial aid package doesn’t quite cover their overall cost of attendance.

If you’re doing the math and find you need more money, you’re not alone. You’ve come to the right place for student loan advice. Here’s information to help you secure the best possible loan and keep your academic and career goals on track.

Take Advantage of Grants, Scholarships, and Free Financial Aid First

Earning money that doesn’t have to be repaid is like striking gold for college students. Apply to every scholarship possible. Accept grants that you’re offered. If your financial aid offer includes a work-study program, accept it if you can balance academics and work.

Use your savings and consider getting a part-time job over the summer to pad your savings account. Accept financial help from parents and loved ones with a “thank you” if they offer. Your goal is to cover as much of your college costs as possible without loans.

Understand Your Financial Aid Letter

At this point in the year, you’ve completed the Free Application for Federal Student Aid (FAFSA), and you’ve received a letter detailing the federal student aid available to you.

In addition to certain scholarships and grants, this letter will also include federal student loan options. All student loans, including government loans, must be repaid. It’s important to compare those federal loan options with private or alternative loans and secure the loan with the best terms and the lowest interest rate.

Borrow as Little as Possible

Money provided to you via a loan will accrue interest over time. Interest is the money you pay the lender in exchange for the student loan. The more you borrow, the higher your monthly payment will be and the more interest you’ll pay.

Another important piece of student loan advice is to borrow only what you’re confident you can repay in a timely manner according to the terms of the loan. Consider using NC Assist’s Smart Borrower Calculator, which estimates the maximum most experts would suggest you borrow.

Consider Asking a Responsible Adult to Co-Sign Your Student Loan

Federal student loans are available to students regardless of their credit history, which often makes them the most accessible option for undergraduates who are taking the loan out alone.

Most 18-year-olds don’t have an established credit history that proves they pay off debts. As a result, they often cannot qualify for the best interest rates available from private or alternative lenders. A responsible co-signer with an established credit history, such as a parent or trusted relative, may help students qualify for certain loans. It’s important to remember that a co-signer may be able to help you secure better interest rates on a private loan.

Select a co-signer carefully, and make sure to come to a clear agreement about who’s responsible for the loan payments. Your financial reputation and their financial reputation are both at risk if payments are skipped.

At the Very Least, Make Payments Toward Interest While in School

Students often hear they can “defer” their loan until after graduation. This allows them to focus on academics while they complete a degree and plan to pause payments until they earn a salary as a professional.

Unless you have a subsidized federal student loan, your loan is accruing interest while the payments are deferred. The interest is later capitalized, meaning the unpaid interest that was accrued while you were in school is lumped into the principal loan amount, and you pay interest on the accrued interest. While confusing, it’s an expensive fact about loans that students often overlook or misunderstand.

If you can afford to, pay off the interest while you’re in college. It could save you thousands in the long run.

Set Up an Automatic Draft for Your Loan Payments

There are multiple benefits to automatically drafting loan payments each month from your bank account. First, protecting your financial reputation is very important for securing loans in the future; for example, you need a good credit history to finance a car or take out a mortgage for your home. Automatic drafts help ensure you don’t miss a payment.

Second, many lenders offer a discount for borrowers who agree to automatic drafts. NC Assist offers a .25 percent rate reduction to borrowers who sign up for auto-draft payments during the repayment period.

Consider NC Assist Student and Parent Loan Options

As a nonprofit lender, NC Assist doesn’t have a corporate earnings report or shareholders to satisfy. Our top priority is helping North Carolina students find the best ways to pay for college while keeping costs as low as possible. There are no application fees and no penalty for early repayment.

Visit our website to learn more about the loan options available to students and their parents.

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