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Five Things to Know About Borrowing for College
If you need loans, borrow, but borrow smart
College is one of the best investments you can make in life. Each year, studies show that a person with a bachelor's degree can earn much more over a lifetime than a person with just a high school diploma. So if you need to borrow for college, it’s well worth it. Here are five things to keep in mind if you do borrow.
- Apply for gift aid such as grants and scholarships. You won’t have to repay gift aid.
- If you borrow, borrow federal loans before private loans. Why not just use a credit card or get a loan on your own without involving a school? Because some loans are a better deal than others. The interest rates on federal education loans are usually low and paying them back is easier because you're given more time. And unlike other loans, you don't have to have money to borrow money — no collateral required.
- Borrow only what you need to cover expenses. Borrowing extra for that really nice stereo might seem like a good idea now, but when you have to pay it back and your stereo is four years old, you won't see it quite the same way.
- Think about how you'll pay back your loans before you borrow. Borrowing $40,000 to prepare for a $20,000-a-year job probably isn't a good idea. To learn whether a degree in your chosen field will cover likely student loan payments, refer to AIE’s Major Choices.
- Apply for aid as early as you can. Studies show that the sooner you submit the FAFSA, the more likely you’ll receive the aid you need. To apply for loans or other forms of financial aid, you will first need to fill out the Free Application for Federal Student Aid (FAFSA). The information that you and your parents provide on this form serves as the basis for determining your eligibility for federal student aid, and for state and institutional aid programs. The financial aid administrator at the college or career school you attend will determine your eligibility. You should contact the financial aid office to get more information about the individual requirements of each program.
Contact the financial aid office at the school you plan to attend, or TG Customer Assistance at (800) 845-6267.