What do I mean by lower cost? Well, free money is, of course, the best money. Make sure that you look into and apply for any grants, scholarships, fellowships, work-study, or any other money that you dont have to pay back. After free money comes borrowed money and the best deals in borrowed money are always from the federal government.
Up until July 1, 2010, federal money was borrowed from private lending institutions and the government made sure that lenders were paid back if students or parents defaulted on loans.
Today, federal money comes straight from the federal government through the Direct Loan Program, a part of President Obamas Health Care and Education Reconciliation Act of March of 2010.
This is good for students in several ways:
If avoids the confusion caused to families when both federal money and private money come from the same lender.
It creates competition among private lenders which will serve to lower interest rates and bring them closer to those of federal loans.
It slightly increases the amount of Pell Grants (free money thats only available to those students who are most in need.)
Many students have also been attempting to make due with credit cards, assuming that theyll have a job right out of college and be able to start paying off their debts. In todays economic climate a job right after college is certainly not guaranteed. This often leaves students with several
student loans that all come due at the same time and credit card debt that they cant repay and this may affect their credit ratings for years to come.
Credit cards are not a good way to come up with money for school. New credit card legislation is making it more difficult for students to get credit cards, which is a good thing for students, although they may not think so now.
Anyone under 21 who applies for a credit card will either need an older co-signer or a proven source of income.
Credit card companies are no longer allowed on college campuses and they can no longer offer promotions to students to get them to open new credit card accounts.
So the best bet for college money?
Sign up for a student loan program in any college money provider website. Plug in student information and up to 20 lenders at a time will be matched with you. You will then be able to call or email them for further information. Students also have the opportunity to look at a 1000 scholarships as well as get all sorts of information regarding student loans, scholarships, grants, and fellowships.
Fill out a FAFSA or Free Application for Federal Student Aid. If youd like to take advantage of federal money you need to do this. Many colleges also require it.
Take free money first.
Take any federal loans available to you second.
Borrow
private student loans after youve maxed out all of your federal loan opportunities as your third option.
Keep credit card debt as low as possible.
