How to Take Out Student Loans for College

By Victoria Robertson on July 21, 2021

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Unfortunately, given the extremely high cost of attending college student loans are a necessary evil, and a confusing one. That said, they shouldn’t be taken lightly. In fact, you should pay a lot of attention to what you’re signing up for, prior to committing to a loan. The fact that you need it isn’t enough to just sign off. To help you out, here are a few tips for taking out student loans for college!

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Federal Loans

Federal loans are, simply put, what the government believes you will need financially in order to attend college. More often than not, these loans will not cover the entirety of your school expenditures, but they are helpful and should be applied to first.

Fill out the FAFSA

First and foremost, you and your parents will need to fill out your FAFSA form, which is a process that will need to be repeated prior to every school year. This form is what the government will look at in order to determine how much money to loan you for the upcoming school year.

It’s worth noting that FAFSA is considered on a first-come, first-served basis. This means that the earlier you submit your form, the better off you are. So as soon as the form is available, fill it out and send it in. Don’t sit on this one.

Fully Learn What Your Award Letter States

If you applied to financial aid at the school of your choice, make sure you fully understand what you’re being allocated for the year. Be confident in how much money you are being awarded versus how much you will still need to pay in order to attend.

Select the Right Loan

The last step of the process is to select the right loan for you. You’ll receive a letter from the government dictating what you’ve been awarded versus offered in a loan, and from here, you decide what you want to do.

Consider whether or not you need all of the money offered in a loan, consider the interest rates and other fine print and only sign off when you are positive in your decision.

Private Loans

Private student loans have become increasingly popular, but be forewarned: they are tricky and can end up costing you so much more in the long run. Many private student loan companies prey on students desperate for fast cash, so you should be very choosy and really take your time with learning about the various options available to you before signing anything.

Research Lenders

The first step in researching private student loans is in researching lenders themselves. Don’t just look at a lender’s website either, as its in their best interest to post only the positives.

Dig deep and uncover reviews of past students that used these organizations, learn about their stories and choose the right lender accordingly. If you receive junk mail from any lenders, ignore it. You are in charge of your lender decision, so don’t let marketing collateral make that choice for you based on ease.

Find the Right Cosigner

The next step is to find a cosigner that’s comfortable signing onto your loan and that fully understands what that entails. Additionally, it’s helpful to have a cosigner with good credit to help decrease the potential interest rates.

While a cosigner isn’t always necessary, more often than not, they are going to be, as you’ll be taking out a large sum of money. Make sure you have your cosigner picked out before completing any paperwork, as you’ll need their information as well.

Also, note your cosigner is responsible for your loans should you default on them. So be aware of the size of this ask before making it.

Learn About Fine Print

Many student loan companies sound great in theory, but in practice, they’re going to cost you an arm and a leg. Look at all the fine print before signing anything. For instance, if they’re offering high variable interest rates or 13% fixed interest rates, it’s probably best to look somewhere else.

Make a Decision

Lastly, it’s your call to make. Just make sure you’re considering everything mentioned above, that you’ve done your research, and that you’re confident in your choice. This is a huge financial decision, so it’s important that you feel comfortable and confident in making it. Too many students take this decision lightly, so don’t fall victim to the same mentality. This is a serious decision and should be taken as such.

Student loans are a challenging, confusing, and oftentimes risky process to undergo. While getting money for college isn’t the challenge, paying it back certainly is. So before you sign on for a loan that’s going to cost you big time in the long run, use these tips to select the right loan for you, with minimal long-term impact.

It’s no secret that college costs a lot of money. Make sure your investment in higher education is protected with GradGuard. Our affordable tuition insurance and renters insurance plans are specifically designed for college students. Customizable plans make it easy to protect your tuition, room and board, laptop, bike, and so much more.

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