In the world of higher education financial aid, student loans are the most prominent player. Chances are, if you're going to college, that you're going to rely on loans at some point during your schooling. And you may have a lot of questions about student loans.
Questions like, how do you get a loan? How much money should you borrow? Should you get a subsidized student loan or go for a private loan? How are loans paid back? What if you can't pay your loan back? Are there any programs that let you work off your loan obligation?
Getting a student loan, or at least applying for one, is relatively easy. You will fill out a FAFSA financial aid assessment form when you apply to college. Based on your FAFSA, you'll be offered various financial aid options by the school you're planning to attend. Those will probably include federal and possibly state student loans. All you have to do is decide which of the aid options being offered you want, and sign the appropriate paperwork. While there are private student loans available, these are not generally the best deal. If you're eligible for government loans you should take them. The reasons are all about money. You'll get better interest on a subsidized loan, and you'll have better repayment terms.
The primary reason for taking a private student loan would be if for some reason you don't qualify for a federal loan. Loan repayment for federal loans begins after you leave college. Your payments will be determined by the amount you borrowed. You usually have a six-month deferment before payments begin. If you return to school your payments will be deferred. There are other reasons you can request a deferment, related to health, unemployment, or military service.
If you're having trouble repaying your loan, there may be ways to deal with that. Your loan servicer (the company managing your loan) will work with you in most cases, if you have a legitimate hardship. Programs do exist that pay off your student loans if you do certain things, like teach in an underprivileged area. You might be interested in checking out one of these programs if you're interested in public service and might like to do whatever is required.
However, unless you really want to do what it takes to have your loans paid for free, you might be better off getting a higher-paying job doing something you love, and paying them off yourself. Student loans sometimes get a bad rap, because you're basically borrowing money to go to school, with no guarantee that you'll get a job after school. That's true. There is no guarantee.
But the fact is that most people with college degrees make more money and have better job satisfaction than most people without college degrees, and student loans are the tool most people need in order to go to college. Whether you look at student loans as a blessing or a necessary evil, they will help you get where you want to go, and used wisely, they are very beneficial.