Choose the right student loans, pay back less

choose the right loanIf you’re like most students and parents facing a tuition bill, you’re going to need to borrow. That’s a pretty simple reality.

It does get complicated, however, because there are many different types of student and parent loans. Remember don’t make the mistake of borrowing private student loans before maximizing federal ones. Here’s a quick rule of thumb to help you figure out where to borrow.

Undergraduate Student

Generally speaking*, a borrower should exhaust each of the following sources before moving on to the next one listed:

If further borrowing is necessary:

Graduate / Professional Student

Generally speaking*, a borrower should exhaust each of the following sources before moving on to the next one listed:

If further borrowing is necessary, choose between:

* Of course there are exceptions to these rules, so do your own homework and investigation. For example, some schools offer their own loans with lenient terms. There may also be state loans available to you with terms better than federal or private loans. Read your financial aid award letter. Ask your financial aid office. Learn about all your options. And always shop around.

** Perkins loans only represent 2% of all student loans each year and are generally awarded to lower-income students. Some schools don’t have access to Perkins loan money, even if you would have qualified by need (so don’t blame the school; availability of funds for Perkins loans has been established through a confusing political process that goes back decades).

 

Paying for Grad School