Everything You Need to Know About Student Loans

College tuition is getting higher and higher every year. Unless your parents have been saving for college since the day you were born, chances are you will have to look for different ways to pay for it. A common way to help pay for college is to take out student loans. Before you do that though, let me take you through a crash course on student loans.

The Facts

With student loans, there are two main directions you can take: private loans and federal student loans. Federal student loans have many benefits, making it the more popular option, while private loans are more restrictive. You can read the differences between federal and private student loans here. Private loans often have higher interest rates and require payments while you’re still in school, making them my least favorite option. I will now offer student loan advice for before college, during college, and after college.

Before College

Like other forms of financial aid, the process of receiving federal student loans starts with filling out the FAFSA. Based off this, you will be notified about what forms of financial aid are available to you. This includes grants, work study, and student loans. Unless you’re a very special case (criminal background, high household income, etc.), you will receive, at the very least, an offer of an unsubsidized federal student loan. The amount depends on a variety of factors, such as, your school’s cost of attendance and your year in school. Since the interest rate changes from year to year (depending on the loan), check the Student Aid government website for the current interest rate. Afterwards, you need to complete entrance counseling, a tool used to make sure you understand your obligation to pay back your loan, and sign a master promissory note, which states the terms of the loan. Federal student loans should always be a last resort though because debt can be a sword hanging over your head.

As for private loans, I strongly advise against them, due to their high interest and many restrictions. You’re better off using any other source to pay for college. If you do find you need to take private student loans, there are a few things you can do to make it easier. The first is, obviously, know the terms and conditions of the loan. Look out for important details, like your lender, interest rate, restrictions, and repayment terms. The second is to negotiate with your bank/lender. Banks are in the business of making money and, while they will always collect on their debt, they prefer it to be done quicker and cheaper. If you don’t like the terms because you can’t possibly follow them all, talk to your bank. They might find it in their best self-interest to lighten the load.

During College



There isn’t too much you can do about federal student loans while in college because you aren’t required to pay them until after you drop below part-time, graduate, or leave school. However, if you are financially able, it is good practice to pay down your interest while in college and maybe even some of the principal. Why? This reduces the amount you have to pay back in the long run. Student loans, like most loans, compounds interest. By paying down your interest, you’re ensuring that you’re only paying interest that comes from the principal. If you pay down the principal as well, you manage to decrease the overall amount of interest you pay even further.

Paying down your federal student loans in college is not necessary but it is something that pays off in the long run. As for private loans, most of them require payment while you’re in school.  If you do find yourself the lendee of a private loan of this type, there are a few things you can do to keep up with them. One is to negotiate with the bank. Another is to ask for financial assistance from your family. Just because they couldn’t pay for college out of pocket doesn’t mean they can’t help out here and there with your loan payments. Another method is to focus on making extra income. You can pick up extra shifts at work or get a part-time job. You can sell things you don’t need on eBay or Amazon. Also, look into things like blogging, taking surveys, and doing online freelance work. Here’s an article detailing some creative (legal) ways to make extra money.

After College

This is where the federal student loans come into the spotlight. After you graduate, drop below part-time status, or leave school, you have six months before you have to start paying back your loans. Once that happens, you can select a repayment plan from a number of repayment plans. Federal Student Aid has the information about all repayment plans here.

What if you can’t afford your payments? You have three options: changing your payment due date, changing your payment plan, and consolidating your loans. If none of these options work for you and you simply are unable to make a payment, you may be eligible for a deferment or forbearance. However, these options do not stop interest from accumulating. Also consider extra (legal) sources of income to help make ends meet during tough financial periods.


This wouldn’t be a discussion on student loans without talking about the alternatives. For many people, including me, it may seem like there aren’t that many options. Sometimes, you just don’t have the money. However, there are many paths you can take, such as scholarships and paying your way though college.

Applying for scholarships can be frustrating. You spend hours on an essay you couldn’t care less about and still not get that $1,000. It doesn’t have to be that way though. Many scholarships are just as simple as applying to scholarship aimed towards your major, race, and family history. While each scholarship may only get you $500 but you can always apply for more than one and every dollar counts. As if college wasn’t hard enough, another one is simply paying your way through college. This requires working multiple jobs over the summer, working a job during the semester, and asking your family for financial assistance. It will be difficult but it’s possible.

I know it’s a lot of information to take in so feel free to return to this article anytime. Best of luck!