Loans 101 for Students
You've made the decision of a lifetime – you want to go to college. Now it's time to figure out how to pay for it. We’ll guide you through the financial aid process and help you determine the best ways to finance your education.
Paying for College
fore you take out a private loan, exhaust other options first, including scholarships, grants and federal loans. Also, be sure to fill out theFree Application for Federal Student Aid(FAFSA).
What Can I Afford to Borrow?
Taking out a student loan is a big responsibility. The following guidelines will help you make informed decisions.
Determine Your Future Income
One way to determine the amount of debt you can handle is to estimate earnings after graduation. Since it’s difficult to predict the job market and how long it will take to land a job, be conservative. For help determining average earnings for specific careers, consult the U.S. Department of Labor, Bureau of Labor Statistics.
Set a Budget
Your monthly student loan payment should not be more than 8% of your monthly salary. When calculating your income, factor in other debts (e.g., credit cards) as well as day-to-day living expenses. To estimate your monthly budget, enter your estimated income and expenses in our monthly budget helper.
Borrow Wisely
To assist you in planning how much you can afford to borrow, check out our loan repayment calculator.
Be Smart About Credit
Establishing, building and maintaining good credit couldn’t be more important. It will affect your ability to rent an apartment, apply for a mortgage and even get a job. Be aware that when you take out a student loan, it will be reflected on your credit report, as will your history of repaying that loan.
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