Need a loan to help pay for college? Consider federal loans first!
Federal student loans are an investment in your future. You should not be afraid to take out federal student loans, but you should be smart about it.
Federal student loans offer many benefits compared to other options you may consider when paying for college:
- The interest rate on federal student loans is fixed and usually lower than that on private loans—and much lower than that on a credit card!
- You don’t need a credit check or a cosigner to get most federal student loans.
- You don’t have to begin repaying your federal student loans until after you leave college or drop below half-time.
- If you demonstrate financial need, the government pays the interest on some loan types while you are in school and during some periods after school.
- Federal student loans offer flexible repayment plans and options to postpone your loan payments if you’re having trouble making payments.
- If you work in certain jobs, you may be eligible to have a portion of your federal student loans forgiven if you meet certain conditions.
NOTE: This program requires at least 1/2-time enrollment in order to maintain eligibility. Be aware that some programs may require full-time enrollment.
Before you take out a loan, it’s important to understand that a loan is a legal obligation that makes you responsible for repaying the amount you borrow with interest. Even though you don’t have to begin repaying your federal student loans right away, you shouldn’t wait to understand your responsibilities as a borrower.
If you would like to meet with a Financial Wellness expert before you borrow, send us an email at Financial_Literacy@csustan.edu
Click through this presentation to learn about key differences between federal and private loans.
Here are five key points to know about debt and borrowing money
Updated: October 14, 2022