Financial Aid Be A Smart Consumer

Be A Smart Consumer

Paying for help with applications: Are you thinking about paying someone to help you complete financial aid applications? Before you do, read our tip sheet to find out why this is not necessary and how to protect yourself (on the preceding pages).

Scholarship search services: No one can guarantee to find you a scholarship for college. Some scholarship search services misrepresent their services, guaranteeing that they can obtain scholarships on behalf of students. Other fraudulent companies tell students they have been selected as “finalists” for awards that they can receive only after paying a fee; a legitimate financial aid offer does not cost money! For more information, contact the Federal Trade Commission.

Before you take out a student loan, think carefully, because you do have it repay it! Check out ways to cut costs and only borrow the minimum amount you need. You do not have to take the full amount of a student loan offered to you. Especially, be careful about borrowing during the first year, because if you decide to discontinue school you will still owe the debt. Be conscious of the total amount you will borrow by the time you graduate, and the total cost of your loan and the monthly payments required. It is best to keep your monthly payments to not more than 8% of your estimated gross income after graduation.

Private student loans: If you decide to borrow, think federal aid first! Federal loans offer borrowers lower interest rates and have more flexible repayment options than loans from banks or other private sources. Learn the difference between federal and private education loans, which are more expensive and do not have the many consumer protections that federal student loans offer. Always take federal loans first! Not sure which is which? Ask your financial aid administrator.

If you do decide to take out a private student loan, do some comparison shopping first with these independent and unbiased loan ratings. And, check out the Federal Trade Commission notice about deceptive student loan offers.

Source: NASFAA.org

Financial Aid

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