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What You Need to know Before Getting a Student Loan

Thousands of students as well as their parents are not able to pay in full for their college tuition due to a lack of sufficient savings. Due to this, they are forced to apply for loans in order to pay for their college education. Statistics indicate that two-thirds of college graduates in the United States enter the work force with some amount of student loan debt. In the end the aid that is available to students vary from situation to situation, however there are a few things that you must know before you begin to fill out your student loan application. Here is a list of six facts that you must clearly comprehend before starting the application process in order to fully understand how your student loan works.

Know the Type of Loan That You are Applying For

In the majority of cases, students are able to qualify for more than just one loan. It is therefore very important that you know the main characteristics of every type of loan that you decide to apply for. Stafford Loans, Perkins, and PLUS loans each have their own unique features and rules. Knowing the types of debt that you are able to obtain will streamline and make your application process much simpler.

Know and Understand Your Credit Score

As with other types of debt, your credit score will likely affect the type of loan as well as the amount of money you can take out. It is important to ensure that all errors in your credit score are corrected and reported before sending it in to a financial aid officer. There are a few types of loans that do not require your credit score for approval, and so if your have poor credit then it is a good idea to research the types of student loans that will fall into this category.

Know Your Earning Potential Once You Graduate

If you want to major in English or art then the odds are pretty good that it will be difficult to find a steady and good paying job after you graduate. It is essential that you research and discover what other college graduates with your major are earning and if they are able to effectively pay their student loans.

Know Terms and the Size of Your Loan Payments

If you are expecting to earn a starting salary of $30,000 when you graduate then paying  $500 every month can be almost impossible to realize after you have paid all of your other monthly bills. Some financial experts believe that the federal government has made it much too easy for students to acquire a massive amount of student loan debt, and so many college graduates face an uphill battle in order to pay off their student loans on top of their other debt such as car payments and credit cards.

Know Your Options If You Enter the Military

Students who have served or are currently serving in the military are provided with special student loan options given to them by the G.I. Bill and other similar programs. In the majority of cases these types of loans will provide substantially improved loan terms than other types of student aid. If you are thinking about entering the military or are currently enrolled then consult the Family Assistance Center for further information on what student loans are available to you.

Know the Amount You are Prepared to Borrow

Many college students graduate with much too high of student debt for them to handle. In order to avoid being one of them, it is a good idea to have a dollar amount in mind that you are willing to take out. Once this is done it is a good idea to create or find alternative sources of funding the balance of your student debt. For example, joining the military for a term and utilizing the enlistment bonus to pay for your college education can dramatically reduce the student loans that you need to borrow. Another way is to work part time during the school year and then full time during the summer in order to lower your student loan expenses.