ETFOptimize | High-performance ETF-based Investment Strategies

Quantitative strategies, Wall Street-caliber research, and insightful market analysis since 1998.


ETFOptimize | HOME
Close Window

How to Borrow for College Without the Stress

photo

SPONSORED CONTENT -- (StatePoint) A student loan can be a valuable tool to help you earn your degree – and with the right plan, it doesn’t have to be stressful.

“Smart borrowing starts with knowing the basics. The more you understand, the more confident you’ll feel,” says Dan Kennedy, chief marketing officer, College Ave. “Our research finds that while a majority of students are focused on money management, they could use a little more information about how borrowing works.”

To help ensure your student loan helps pave the way for your future success, not a future headache, Kennedy recommends avoiding these common borrowing mistakes:

Skipping federal student loans: Before taking out a private student loan, exhaust your other options first. Free money you don’t have to pay back is always preferable to a loan, so look into scholarships. You should also fill out the Free Application for Federal Student Aid (FAFSA) to unlock federal student aid, including grants, scholarships and federal student loans. Getting your Federal Direct student loans from the government will often beat private loans in terms of interest rates and repayment options. Plus, if you go into a qualifying field, the government may even grant you student loan forgiveness.

Borrowing too much: Borrow only what you need to pay for schooling and basic living expenses. This will help eliminate the temptation to use the money on items that are not an investment in your future. You should also avoid borrowing more than you can comfortably repay based on your expected future income. A College Ave March 2025 student survey found that 67% of those who expected to have student loan debt post-graduation didn’t know or were unsure of how much their monthly payments would be. Before taking out a loan, use CollegeAve.com’s student loan calculator to get a sense of its overall cost and monthly loan payments.

Not shopping around: If you do end up taking out a private student loan, it’s important to pay attention to lenders’ interest rates and repayment options. Unlike federal loans, which have fixed interest rates for all borrowers, private student loan interest rates vary from lender to lender. And because your repayment plan can impact your monthly payment and overall cost, it’s key to choose one that fits your budget. Whatever loan you do go with, understand its terms, so there are no surprises down the line.

Not having a cosigner, if needed: As a college student, you likely don’t have an established credit history or sufficient income and may not get approved for a private loan on your own. Consider improving your chances of getting approved and securing a lower interest rate by adding a cosigner, like a parent, to your loan application.

Not having a repayment strategy: The College Ave survey found that 76% of students say that they confidently pay their bills on time each month and 63% are working toward personal financial goals. Carry these healthy financial habits with you to the repayment stage of your loan. Having a plan for repayment can make a big difference down the road. Think about when you’ll start making payments and how much you can afford each month. The more prepared you are, the less stressful it’ll be when it’s time to pay it back.

College is a big investment, and having a smart approach to paying for it is essential. After applying for financial aid and scholarships, and maximizing your income and savings, do some groundwork to ensure that if you have to borrow, you are borrowing smart.

Photo Credit: (c) JLco - Julia Amaral / iStock via Getty Images Plus

Stock Quote API & Stock News API supplied by www.cloudquote.io
Quotes delayed at least 20 minutes.
By accessing this page, you agree to the following
Privacy Policy and Terms Of Service.


 

IntelligentValue Home
Close Window

DISCLAIMER

All content herein is issued solely for informational purposes and is not to be construed as an offer to sell or the solicitation of an offer to buy, nor should it be interpreted as a recommendation to buy, hold or sell (short or otherwise) any security.  All opinions, analyses, and information included herein are based on sources believed to be reliable, but no representation or warranty of any kind, expressed or implied, is made including but not limited to any representation or warranty concerning accuracy, completeness, correctness, timeliness or appropriateness. We undertake no obligation to update such opinions, analysis or information. You should independently verify all information contained on this website. Some information is based on analysis of past performance or hypothetical performance results, which have inherent limitations. We make no representation that any particular equity or strategy will or is likely to achieve profits or losses similar to those shown. Shareholders, employees, writers, contractors, and affiliates associated with ETFOptimize.com may have ownership positions in the securities that are mentioned. If you are not sure if ETFs, algorithmic investing, or a particular investment is right for you, you are urged to consult with a Registered Investment Advisor (RIA). Neither this website nor anyone associated with producing its content are Registered Investment Advisors, and no attempt is made herein to substitute for personalized, professional investment advice. Neither ETFOptimize.com, Global Alpha Investments, Inc., nor its employees, service providers, associates, or affiliates are responsible for any investment losses you may incur as a result of using the information provided herein. Remember that past investment returns may not be indicative of future returns.

Copyright © 1998-2017 ETFOptimize.com, a publication of Optimized Investments, Inc. All rights reserved.