Paying for College – Which Type of Student Loan Do I Choose?

Paying for College – Which Type of Student Loan Do I Choose?
  • Opening Intro -

    You have the credit card, the student loan and the freedom to be responsible with yourself without the immediate obligatory parental permit –

    – well, at least that may be what it seems.

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But in actual fact, managing those kinds of expenses means you will need to adopt a pretty savvy kind of financial structure if you don’t want to become overwhelmed by over-committed monetary problems.

The most at risk are the first time collage attendees. Overspending is a breeze, but getting out of it take a lot more time and sacrifice than some may realize. It is challenging, even for the most grown up of grown-ups and things are not getting any cheaper to get through your college degree. The average American graduate comes out of college with an accumulated debt of close to $35,000.

Ask most graduates – in fact around 40% of them – and they will tell you that in hindsight, they wish that they had approached their financial management with a lot more control and a good budgeting plan.

Plan Plan Plan

It is imperative to establish a method where you have a plan and you stick to it, reducing the chances of overspending and putting in place an “essentials only” budget. Identify what it is that you can honestly say are things you need, as opposed to things you want, and stick to it!

The value of a budget is immense and will not only help get you through your years at college, but will set you up for life with the ability to plan out a financial path that will keep you in good stead for the rest of your life. There are money saving tips everywhere around you, the key is being able to identify them and put them into practice as a non-negotiable life skill.

Here are some useful tips on how to create a budget on this site: https://studentaid.ed.gov/sa/prepare-for-college/budgeting/creating-your-budget

Keep Track of your Income and Expenses

If you are lucky enough to have additional support from family, that’s great, but consider if your parents for unforeseen reasons couldn’t sustain their contribution and you found yourself financially shipwrecked. Conversely, there are many of us who don’t have the luxury of auxiliary help, so every little counts in a world where there are very real bottomless pits.

Here, we would love to give you the tool to control your spending and help you on the way to financial liberation. One of the first steps you can take to create this utopia is to look for some part time work. Any job is a good job, so don’t be picky!

The Labyrinth of Student Loans – Which One is Right for You?

Love them or hate them, they are the way forward. Even countries who have been hailed as super welfare states have pulled the plug on government funding, so paying your way is here to stay. A student loan will give you the means to have a basic financial structure. There is a day of reckoning, however, and this must eventually be paid back upon graduation or leaving university. There are two options available to you.

View our quick summary information on federal and private student loans:

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1. Federal Loans

The Department of Education offers these to undergraduates and graduates who qualify under their criteria. They offer a lower than normal interest rate, the ability to defer payments, and loan forgiveness.

The eligibility if governed by the need for assistance together with the degree level you are studying at. Accredited school undergraduates are entitled to up to $16,500 per year and this is underwritten by Perkins Loans and Direct Subsidized and Unsubsidized Loans. Graduate students, however, can apply to borrow up to $28,500 per year, but the interest rate is usually current market value.

2. Private Loans

These are lent out from private institutions, such as banks, credit unions, school or government agencies. Interest starts to accrue from the moment the loan is taken out, but the criteria differs from that of a federal loan and is not needs tested. The repayments can be inflexible and interest is usually higher. This should only be used as an alternative option after you have exhausted the possibility of a federal loan.

Please share on your favorite social media sites if you feel this has been of use to you, as I am sure plenty of like-minded financially challenged students out there would appreciate a bit of help.

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Last update on 2018-05-21 / Affiliate links / Images from Amazon Product Advertising API

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Categories: Student Loans