Savvy Students Turn Debt into Dollars?

Answer 1

Incoming college students are often daunted by the task of applying for student loans. Understandably, the student loan experience is usually the first time that most college freshmen enter a serious contractual obligation involving thousands of dollars of debt from the beginning. To stress over and even avoid applying for student loans, however, is only to deny the highest yield investment in the world: education. By understanding the process of applying, the difference between federal and private loans, and the magnitude of the commitment, students will be able to seriously grasp the concept and overcome any stress that may first accompany it.

All college students are highly recommended to first pursue government loans as they are extremely low interest and often very flexible. Filling out a Free Application for Federal Student Aid or FAFSA is the first step in doing this. After the application is completed, the student will be informed of the amount to which he or she is entitled according to the government�s need-based calculations. Upon processing, then, the government will eventually notify the student that the loan money is available and will be contributed to tuition cost on whatever day.

Private loans are for students who require financial supplementation after all government assistance has been exhausted. Major institutions such as Wells Fargo and Wachovia provide these loans at higher, usually non-fixed interest rates. Most students will be evaluated as dependents based on their income and will require a co-signer. Ensuring the legitimacy of the loan by reading the entire contract as well as safeguarding personal information are vital to the student�s financial safety.

While providing fraudulent information on these applications is of course a federal offense, ensuring that all relevant information of any kind is provided will only maximize a student's eligibility for assistance. In many instances, moving out, filing taxes independently, and other steps towards self-sufficiency will increase the perceived need thus increasing the amount of assistance received.

The final and most pertinent advice for any students seeking financial assistance is to commit to completion of both education and loan repayment. Changing one�s degree is a natural part of the college experience, but dropping out after receiving student loans will only exacerbate the process of repayment, as less education means less earnings. With that considered, there is no excuse that any committed, prepared student should forego the opportunity for a solid education and a better life.