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Not many people can get through college without incurring some form of debt. Even with full academic scholarships there can be unforeseen expenses that can mean the difference between a semester of studying and one spent working a part-time job. The sad reality is that most parents never save enough money for their children to attend school. There is money available but only if you make a certain amount or less. Most people must take out student loans in order to attend school. There is a lot of information to process about student loans. If you have questions regarding student loans, this article is for you.

What are student loans?

Student loans are exactly as they sound. They are loans designed to help students with their educational expenses. Most students need money for college tuition, books, lab fees and living expenses. Granted there are federal programs that give students money for school, such as Pell Grants, but these are income based. If the parents make too much, they must rely on savings, scholarships and loans to cover the expenses.

How do I apply for student loans?

The first thing you need to do is go to the college, university or vocational school and enroll. The second item on your "to do" list is to fill out a Federal Student Aid Application. It will take several weeks for the application to be processed and notification of monetary award sent to the school and yourself. This is not something that can be rushed so make sure to allow enough time by doing this as early as possible.

How much money should I take out?

This is a hard question to answer. Ideally you should take out only what you need to cover tuition, fees, books and living expenses. There are a couple of questions you need to ask yourself. Are you going to be working? If so?how many hours will you be able to work after you factor in class time and study time. If you are involved in collegiate sports you may not have the time to work. Will you be receiving any aid from anyone else such as spouse or parents? Try to take out just what you will need. Remember that you will have to pay all of this back so let that be your guide in determining how much to take out in loans.

When do I have to start paying the loan back?

For Federal student loans you do not have to begin repaying until six months after you leave school. This is considered a grace period. For all other types of loans you will begin repayment within sixty days of your first disbursement. That means you will be paying at least the interest payment while you are enrolled. That is why so many people go with Federal student loans over private loans.

Is there a way to consolidate my student loans and get a lower monthly payment?

Yes, there are ways to get a lower monthly payment. The Federal Loan Consolidation Program is designed to help former students consolidate their loans and get a better interest rate which in turn means a better monthly payment. Check with your lender to see what you qualify for and also do some checking around for the best interest rates for your debt. A great website to begin is www.ed.gov.

Published by The Money Manager

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