Everyone’s situation is unique. The best student loans generally have the lowest cost
We’re often asked, “What are the best student loans?” The simplest answer is that the best student loan is the lowest cost student loan. However, it can be tricky to decide which student loans cost less than others. Here are a few tips to get you started:
Federal Student Loans are Usually Cheaper
Your financial aid award letter will let you know what your eligibility is for federal student loans. However, you may still need additional funding to cover your expenses. If your parents plan to make up the difference, they can apply for a Direct PLUS Loan for Parents which is a federal loan they take in their name that can cover up to your cost of attendance minus other financial aid including student loans.
Compare Private Student Loans
If you’ve exhausted other low cost borrowing options such as federal student loans, you can explore private student loan options. Private student loans are made by banks and other lenders based on your and/or your co-signer’s creditworthiness. There are a number of lenders making these specialized loans for students and it’s important to compare the terms of each carefully before making a borrowing decision. You can use our LoanFinder to compare student loans and apply online.
Borrow Only What You Need
It sounds like common sense, doesn’t it? The reality is that it’s tempting to just go through the motions and borrow your entire eligibility. Examine your expenses closely and do your best to borrow only what you truly need to cover your costs. Budget carefully. If you take a smaller loan amount at the beginning of a semsester and need more later, you can always go back to the financial aid office and ask them to increase your loan amount.
Reduce Your Need to Borrow
The less you borrow, the less you will eventually end up repaying overall. Here are a few things you can do to reduce the amount you need to borrow:
- Work. There’s nothing like good old work to reduce your borrowing needs. If work is a part of your financial aid package, find a job on campus and use your earnings to offset your personal expenses. If you don’t have work-study, find a part-time job off campus.
- Apply for Scholarships. Outside scholarships are available for all kinds of students. You don’t have to be a genius or dirt poor to qualify. There are hundreds, if not thousands, of opportunities out there. If you don’t apply, you can’t win. Use a scholarship search that matches you with awards based on your specific background like ScholarshipExperts.com.
- Save on textbooks. Find out what books you’ll need for your classes and shop around for the best deal. Consider renting your textbooks or buying used.
- Save on food costs. Don’t buy the most expensive meal plan if you’ll be dining on campus–you’ll never fully utilize it.
- Be frugal. Make a budget and stick to it. If you can get by without a car, do so. If you can live without a smart phone, consider sticking to a feature phone that doesn’t require an expensive data plan. Think in terms of, “do I really need this?” when it comes to your monthly and spontaneous expenses.