Alabama Student Loans

Student studying
According to the Alabama Commission on Higher education, the state includes the following types of institutions of higher education:

According to College Stats, there are at least 90 schools offering coursework in higher education. Of course, the criteria for admission vary at each school. According to U.S. News, the following schools are among the most competitive in terms of acceptance:

As Together We Teach Reports, the top five largest cities by population in Alabama are:

Students who are drawn to a more metropolitan setting can therefore consider schools in these population-dense areas, which include the University of Alabama at Birmingham, Alabama State University (Montgomery), University of South Alabama (Mobile), University of Alabama in Huntsville, and the University of Alabama (Tuscaloosa). Each of these cities has more than one college or university from which to choose. While the best practice is not to pick a college in terms of geography alone (unless it’s necessary), this factor is always an important consideration, and it’s great that Alabama cities offer a range of options.

It is always important to keep in mind during the college selection process that most public state schools assess higher tuition rates for out-of-state residents. However, student who pay in-state tuition will still want to consider which schools offer the best value. According to College Calc, the top five Alabama schools with the lowest in-state tuition rates for Alabama residents are:

According to Pay Scale, the following five schools of higher learning offer the best value for students who pay out-of-state tuition (Note: in the context of this list, the best value means the best return on investment, in terms of employment prospects and other criteria, for educational dollars spent):

The college selection process is one of the most important and exciting steps to entering college. For students who have selected their short list of schools to apply to, a major concern will likely be how to pay for school. The best practice is to get up to speed on all forms of available federal aid. As a rule of thumb, students will want to exhaust all forms of free or gift aid, such as grants and scholarships. The next option is loans, with a general preference for federal loans as they tend to offer the lowest interest rates and most favorable repayment terms.

Student Loans

Loans come from at least three potential sources: the federal government, the state government, or a private lender. Based on a review of the Alabama Commission on Higher Education, the state does not have a state loan program, but this is not uncommon. Part of the reason Alabama, and other states, do not provide state loans is because the federal government runs a comprehensive loan program, the William D. Ford Federal Direct Loan (Direct Loan) Program, and in cases of exceptional need, the Federal Perkins Loan. It is important for students to understand the process of borrowing a student loan. The first step is to complete the Free Application for Federal Student Aid (FAFSA). Based on this information, the admitting Alabama school will determine the amount of federal student loans (if any) that is available to the student. Also of note, the federal government is the lender of Direct Loans, while the school is the lender on Federal Perkins Loans. When it comes to private loans, the private bank is the lender. In the case of private loans, the admitting Alabama school will likely provide students with a list of private banks that have a history of lending to the school’s students. This can help a student who needs a private loan to compare different student loan products between lenders. It is important to understand that the admitting college does not play much of a role in the private loan process. Student borrowers need to be informed consumers and do their due diligence on a private lender and the student loan on offer before borrowing. The Kentucky Higher Education Assistance Authority (KHEAA) works in conjunction with the Alabama Commission on Higher Education to provide information and support to students. KHEAA provides a list of tips to help student borrowers make well-informed decisions about borrowing. Primary tips of interest for private student loan borrowers include:

  • Borrow only what you need (KHEAA’s Loan Repayment Calculator is a helpful tool).
  • Check employment rates and salary prospects for your intended course of study.
  • Student loans can only be borrowed to directly pay for tuition and the costs associated with attendance, like room and board.
  • After graduation, a student’s repayment history will impact (positively or negatively) his credit report and rating.

There is a lot of advice in circulation about how to make the best decisions about borrowing. A helpful rule of thumb is to keep the total amount borrowed as low as possible between all lending sources; however, there is no one-size-fits-all advice for paying for college. The best practice is to be informed about the reality of borrowing and make a smart decision.

 
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