As a college student, you probably don’t have a lot of extra money to use to pay back student loans. Perhaps this has stopped you from even applying, causing you to put off your education until you can truly afford it. Before you wait another year to get your degree, you should know how student loans actually work.
First, you need to understand that you will not have to pay back your student loans while you are still in school. Lenders understand that you cannot work full time while you are enrolled, thus they work with you to give you a way to get your degree and then begin paying off your loans. For instance, if you have federal Stafford Loans, you will not have to begin repaying the loans until after you graduated. In fact, you will be given six months after graduation to give you the chance to look for and land a job before you have to begin making payments. This means that you can focus on your education while you are in school, and worry about repaying your loan after you have the degree you need for a good job.
If you can qualify for a federal loan program, this is the best route to take. Federal student loans have better repayment terms and lower interest rates than most private student loans. Also, federal loans do not focus on your credit rating to the extent that private loans will.
Keep in mind that your loan will be earning interest while you are in school. This means that your loan could cost more than you think it should when you graduate, because the interest it earns before you begin paying will be added to the loan’s principle when you enter the repayment portion. However, the fact that you can put off paying your loan until after graduation may make this additional cost worthwhile.