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It's a Money Thing®

Student Loans 101 

Pursuing post-secondary education should be an exciting time in your life. You’re making decisions and opening up possibilities that will shape your future—a future that is adventurous and fulfilling and that decidedly does not include years and years of crippling debt. Is taking out a student loan worth it? It's not an easy question to ask yourself, but it's one worth considering.


If you’re considering financing your college education with the help of a student loan, the smartest thing you can do for yourself is to only borrow what you truly need. (This advice applies to pretty much all loan products, by the way.)

For many young adults, student loans serve as the first real experience with borrowing a large amount of money.

It’s a steep learning curve for someone just starting out, and not understanding financial concepts like interest rates, loan terms and repayment schedules can quickly snowball into a very stressful and costly post-graduation experience. 

Before you sign on to any loan, do the math to determine how long it will take you to pay back that loan at the average salary you will likely earn from you job, and determine whether of not you're willing to be in debt for that amount of time.


Student Loans: No matter how you choose to finance your education, it's best to only borrow what you absolutely need.


Student Loans: Many students jump into student loan debt without a real understanding of what lies ahead.


Things to know before taking out student loans: 

  • Your loans will either be federal or private. Federal loans are government-funded, while private loans come from individual lenders like credit unions or banks.
  • Short equals less, long equals more. When it comes to repaying your loans, if you opt to pay your loans back over a shorter time, you'll pay more per month, but less in interest over time. If you opt for a longer time to repay, you'll pay more in interest. 
  • Know your grace period. This is how long you can wait after graduation before your loan payments start. A grace period can be helpful if you need time to get a job before making payments. 
  • Forbearance and deferment may help in times of need. You may need to take breaks in payments from time to time. Forbearance or deferment can help in these situations, but their availability vary based on your loan. Check with your lender to see if you qualify.

Reduce your education costs and need for outside financing: 

  • Go for extra credit. Find out if there are any opportunities to earn college credits while still in high school, like advanced placement classes or dual enrollment.
  • Don't leave money on the table. Apply for every form of scholarship, grant, and tuition waiver that you're eligible for. Reach out to your school guidance counselor or the financial aid coordinator at the college you wish to attend for direction. Even the smallest awards add up.
  • Location scout. Generally speaking, staying in-state is usually the more affordable option. In addition to saving on tuition, you can also sidestep some larger expenses, like travel, meal plans, and living on campus. 
  • Try the two-step. (Not the dance.) Start by attending a more affordable institution, like a community college, for your general education courses. Then, transfer to your school of choice to complete your degree. By splitting your studies between the two school, you'll save on tuition expenses. 
Students Loans: Submit a FAFSA to find out if you qualify for financial aid.


Although there are things you can do during your time as a student to soften the sting of student loan repayment (working part-time while in school and sharpening those budgeting skills are two solid strategies), why not get the process started even sooner?

Whether you’re a first-time student or a returning student, it’s in your absolute best interest to whittle down your education costs as much as possible before considering a student loan or alternative financing option. Your future self will thank you.

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