mortagesandforeclosures

by Maxwell Payne

Student loans can be a practical way to fund one's college education. Taking out student loans can help you focus on your education instead of constantly worrying about where the next tuition bill money will come from.

When used properly, student loans can help a student with the expenses of education from undergraduate study to doctorate study.

There are a few things you'll want to keep in mind while applying for and using student loans. Keeping these in mind will help you avoid costly mistakes that can leave you in far more debt than you need to be in.

Always fill out a FAFSA.

This is a critical step in applying for financial aid each and every year of your college experience. You can fill out the FAFSA form at the location. Doing so will help both your school and the government determine your eligibility for need based grants as well as give you access to federal student loans.

You should always fill out the FAFSA for each year. It is free and can help you get money you need for college.

Too many students and families either overlook the FAFSA or think they make too much to be eligible for aid. They end up only relying on private student loans to cover what grants, scholarships, and their own paychecks can't cover. This leads to having more debt after graduation due to the higher fees and interest associated with private loans.

Use student loans for their intended use.

Student loans, both federal and private, should be used for your education and nothing else. You should use student loans to pay for tuition first. Any amount of tuition that isn't paid for by grants and scholarships should be paid by student loans after any money that you or your family is using to pay for school.

You can also use your student loans to pay for room and board for your college education. Using loans for books is debatable. You can save a few thousand dollars in loans by saving up to pay for books each semester. Only use loans to cover books if you really need to.

Don't use student loans for personal use.

Students in graduate and doctoral programs may end up using loans to help pay for rent, food, their car, health insurance, and other expenses that require large sums of money. These students generally do so because they need to focus their energy and time on their studies.

While undergraduate students surely want to stay focused on their education, many fall into the temptation of using left over student loan money to pay for things such as clothing, parties, nights out, electronics, and more.

For most students, using student loans for anything beyond tuition, room and board, and books is not advisable. If you do use student loans for things outside these areas, make sure the loan terms of use allow this.

Your best bet is to take any loan money that was refunded to you or left over and put it in a savings account until you need it. You may need extra for books or to repair your computer (both important items for your studies) and this extra money will be there for that. But if you blow it on a new pair of shoes, beer for all your friends, or an iPod you'll likely be stuck when you need extra money for your school related bills.

Take out what you need.

When applying for private student loans, you may be able to take out a large sum at once. But consider how much you really need. After your family or own contribution is determined and you've factored in grants, scholarships, and federal loans, how much do you actually need?

Consider your circumstances as well. If you need your private loan to cover the rest of tuition and room and board, only take out that much. If you know you might need extra money for transportation costs to get to your internship or school related work, consider that. If you know next semester that your books will cost more, factor that in.

It can be a wise choice to take out a little extra for responsible reasons. If you run out of money midyear and need to get a job or more work hours, you are taking away from time dedicated to your studies which can hurt you in the long run.

Pay them back.

If you graduate and have a difficult time paying back your student loans, don't ignore them. They won't go away and not paying them can severely impact your credit which can trickle down and affect other areas of your life.

If you have trouble paying your student loans at any time, contact your lenders and explain your situation to them. Many student loan lenders are interested in making their money back with interest, some payment is better than no payment. They will likely work with you to help you extend your repayment period, defer payments, reduce payment, and so forth.

But don't simply stop paying them. Talking with your lenders can help you work a plan out and keep your credit intact.

Consider these tips when applying for and using student loans. You'll save money while being able to focus on your studies.

About the Author:

Maxwell Payne will give you the proper tools to help conquer the mountain called student loans; to further educate yourself on paying off student loans checkout the overlooked tips and tricks of paying of student loans.

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