Student Loans

But I thought you got that scholarship or whatever! Well, yeah, but that doesn't cover everything It's just… kind of hard to know what the best option is

Mac & cheese Excuse me? The best option today is mac & cheese We're actually talking about student loans Yeah, for college College, huh? If you ask me, student loans are the Meatloaf Surprise of post-secondary education

A lot of students opt for it without understanding the risk that lies ahead That can't be good Student loans come in two basic food groups: federal and private Federal student loans are government-funded Private student loans can come from banks, credit unions, schools or other private institutions

The interest rate for federal student loans is set by Congress It's a fixed rate that's often lower than private loan rates The interest rate for private student loans varies from lender to lender They're often variable-rate loans, which makes them unpredictable and potentially more expensive than federal student loans over time Uh, can you tell me about your subs? Subsidized student loans? Sure! I was asking about the sandwich in this case, but please continue

Certain federal student loans, such as the Perkins Loan, are government-subsidized This means that the government pays the interest on your loan while you're in school and for a grace period—usually 6 months—after graduation What? That's awesome! Private student loans are not subsidized, so interest starts accumulating from day one and you're responsible for paying it— even while you're a student Be aware that not all federal student loans are subsidized The Stafford Loan, for example, is a direct unsubsidized loan

You're still borrowing money from the government, but you're responsible for paying the interest that accrues during your time at school Hmm… in that case, I want the sub one Well, it's not that simple—you need to make sure you qualify for the loan you want There is a range of federal student loans available, and they all have their own eligibility requirements Some of the criteria are very basic, like being a full-time student and maintaining good grades

Other loans are only available based on financial need FAFSA is a free application you submit to find out if you qualify for financial aid Do private student loans have all this eligibility stuff? Although private lenders don't tend to factor in your financial need, they may have other requirements similar to those associated with regular personal loans You may need to have a good credit score, for instance, or have a parent co-signer There are lots of options out there to choose from, but what I'm worried about is what happens after graduation

Oh, I know what happens— you and your classmates throw your square hat-things really high in the air and everybody cheers No, Jen, I meant paying back the student loan Ohhhh Yeah, that's definitely more worrisome Repayment is an important factor to consider

Federal student loans generally provide more flexible repayment options than private student loans Options include standard fixed payment plans, graduated payment plans where your payments increase over time as you build your career, and income-based payment plans Federal loans are also easier to consolidate Consolidation is when you combine multiple loans into one single loan I'm guessing that private student loans don't have as many repayment options

Private lenders tend to be more rigid when it comes to repayment, and private student loans can be trickier to consolidate I told you! There are so many things to consider! Don't forget to compare additional factors like loan fees and borrowing limits Ooh, try and get one with no borrowing limit That's actually a terrible idea What! Take my advice, kids

Only borrow what you truly need, because just like these extra-spicy buffalo wings, though it might seem like a good idea to load up, you will definitely pay for it later Eww That's nasty Certain federal student loans are government-substidized… substa… subsidized Cut

Let's do this again But that's a long thing to say I need you to concentrate That's a hard word to say Take two

I'm only a Lunch Lady