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Student loan options can be overwhelming at first glance. But when it comes to federal student loans, there are just a few options.

The first step in getting one of the federal student loans listed below is to fill out the Free Application for Federal Student Aid, or FAFSA. While the FAFSA does determine eligibility for need-based aid, it also acts as an application for student loan options, both for need-based and non-need-based loans. It supplies students who need financial aid with that help as well as provides financing options for those students that would like to borrow with low-interest federal loans but don’t necessarily qualify for need-based aid.

Subsidized Stafford Loan
The subsidized Stafford Loan is available to students who qualify for need as determined by the FAFSA. Students must be a U.S. citizen or eligible non-citizen as well as have a high school diploma or GED. Like most federal student loans, interest does not accrue while the student is in school. If students qualify for a subsidized Stafford Loan, it will be stated on their award letter notification along with the amount for which they can borrow.

Perkins Loan
The Perkins Loan is another federal loan option that is for needy students. Again, students must be a U.S. citizen or eligible non-citizen as well as hold a high school diploma or GED. Again, interest does not accrue with the Perkins Loan, and students will find out whether or not they qualify as well as for how much when they receive their award letters from colleges.

Unsubsidized Stafford Loan
Finally, the unsubsidized Stafford Loan is a little different from the other federal loans. For both the subsidized Stafford and Perkins Loans, students must qualify for need as determined by the FAFSA. However, the unsubsidized Stafford Loan is available to any student, regardless of need. Also, unlike the other federal loans, interest accrues while the student is attending school. Again, if students want to apply for the unsubsidized Stafford Loan, they must complete the FAFSA.
Students can also qualify for a federal student loan consolidation after graduating from college or graduate school.

Making Smarter Student Loan Decisions. Remember, loans are not free money!
It’s no secret that college is getting more expensive by the minute.
In attempts to make college possible, many students take out student loans in pursuit of their higher education. While an investment in education is one of the best a person can make, loans can pile up and lead to large amounts of debt.

Universities are able to increase revenue based on the loan amounts given to students based on their post-graduation earnings potential. In actuality, this practice is ironic in nature, seeing as most universities openly proclaim that the value of a degree cannot be abridged to a dollar amount.

Remember, loans are not free money! You must repay them and, when you’re not unable to pay them on time, the debt begins to accumulate. This is the unfortunate situation that many students find themselves in upon graduation, about to embark on a new career.

As a result of student loan debt, many student borrowers find themselves starting out behind, rather than ahead, since they’ve obtained loads of debt which follows them throughout many years of their career.

Make sure you research and consider all of the available options before you borrow.

Ask yourself questions, such as:

Once you’ve decided that a student loan is a route you’re willing to take, make sure to do the following:

Consider Your Likely Post-Grad Lifestyle
Create a cost benefit analysis of the degree you’re working towards. Will your earned degree allow you to obtain a job that will justify taking out the loan? Will you be able to repay it? If so, how quickly?
Make sure you take interest rates, potential salary and the anticipated job market situation upon graduation
After thinking of all these factors, you should be able to get a better sense of whether or not you’ll be able to afford to repay the loan in a timely manner.

Consider Consolidating
Consolidating comes into account when you have taken out multiple loans. When you consolidate, it makes it much easier to repay because all of your student loans are combined into one, with a single monthly payment.

In addition to being easier to pay the bills, consolidating loans also allows lowering the payment amount options as well as the interest rate.

The hazard of consolidating your loans is that it will likely stretch out the payments for a longer period of time and, as a result, end up costing you more money overall.

Consider Grace Periods
Different types of loans have different grace, or repayment, periods. For example, a Stafford Loan has a grace period of 6-months upon graduation, leaving school or dropping courses.

Keep in mind that private loans are vastly different. Usually, private loans don’t have a grace period. This means that, if you borrow private loans for your education, you’ll need to begin repaying upon graduation, leaving school or dropping courses.

Consider Your Interest Rates
Federal loans almost always have lower interest rates than private loans.
If you have multiple loans, both federal and private, it’s always better to pay off the loans with the higher interest rates first, so you don’t accumulate even more debt.

Consider Your Repayment Plan Options
Unless otherwise arranged, you’ll be enrolled into a standard repayment plan. This likely consists of a regularly scheduled payments for the amount of time it takes to repay the loan.
If you review the repayment plan options and decide to go with plans other than the standard, make sure you read and understand the agreement in its entirety. All documents have fine print and student loans are not an exception to the rule!
When considering or taking out student loans always borrow as little as possible. While it may seem helpful to have extra money at the time of borrowing, it’s easy to get into a cycle of debt that’s difficult to repay, making post-grads feel overwhelmed when it comes time to repay the large sums.
Avoid debt whenever possible – one day you will be thankful for making smarter borrowing decisions!