For students

Here's What to Do Before You Apply for Student Loans

For many high school students and their parents, applying for student loans is a big step in the process of turning the college dream into a reality. But planning for and acquiring student loans shouldn't be the first step in paying for college.

If your child is beginning to think about how to pay for college, doing a bit of research and financial mapping prior to applying for student loans will help you make a confident decision when the time comes to help them pick a school and financial aid package. Below, we outline five steps to take before you apply for student loans.

Start Researching Scholarships

Familiarize yourself with all of the ways that college and grad school can be funded. In some cases—like with scholarships and grants, for instance—students receive money that they don't need to repay. Scholarships are awarded by a variety of funding sources, while grants are generally disbursed by schools but are funded by other entities, such as state or federal governments and private organizations.

Unlike other parts of the college funding process, you can apply for scholarships year-round—even before you hear admissions decisions from colleges on your child's list. This might seem out of order, but remember that not all scholarships come from the schools themselves. It's never too early to start your scholarship search.

Ready to begin? Scholly is an excellent online scholarship database, and here are ten more places to look for scholarships. Remember, the more effort you and your child put into seeking out and applying for scholarships, the more likely they are to receive one.

Fill Out the FAFSA

The Free Application for Federal Student Aid (FAFSA) is the form prospective students submit to the Department of Education to determine whether they qualify for aid, and if so, how much. It is absolutely essential to complete the FAFSA if you are seeking help to fund college. Many schools also use the information you provide on the FAFSA to determine the aid they give, and you don't want to miss out on potential grant opportunities. Even before you fill out the FAFSA, you can get an estimate on how much your family will be expected to pay with the FAFSA4Caster tool.

You can put up to ten prospective schools on the FAFSA, whether you've applied to them yet or not. Make sure to complete your FAFSA early, because some grant money works on a first-come, first-serve basis. You can submit your FAFSA as early as October 1st. The FAFSA deadline for the 2018-2019 school year is June 30th.

Compare School Costs

When you're researching colleges, make sure that cost analysis is a part of that research. It may help to create a profile of each college your child is considering so that you can do side-by-side comparisons of your options. The "sticker price" and the actual price paid can vary widely at public in-state universities, public out-of-state universities, and private universities, so be sure to keep an open mind, especially in the early stages of researching schools. Wait until you are provided with scholarship and loan information until you make any final decisions.

In addition to considering each college's tuition and fees, remember to include the costs of room and board, transportation to and from school and around campus, supplies such as textbooks and a laptop, and additional spending money. For more information on how to calculate the cost of college, read this helpful article and use this calculator.

Consider Work-study

The federal government offers a work-study program which pays students to work part-time at eligible employers to help supplement living expenses. These employers can range from the campus library to on-campus research labs to a local nonprofit. A school will inform a student if they qualify via their financial aid letter.

If you think your child will be offered a work-study option, talk with them about where they might want to work on campus, and how this intersects with their choice of major or activities in which they're interested.

Understand All Other Ways to Fund School

If you still have a "gap" to fund after exhausting options for scholarships and grants, you may want to consider borrowing money. Student loans come in two varieties—federal and private. Federal loans are secured through the government and private loans are acquired directly through a bank or other lender. Your personal situation will determine whether federal loans, private loans, or some combination of the two are best for you and your child.

Federal loans have historically offered lower rates and flexible, income-driven repayment plans. Private loans help fill funding gaps when students aren't offered as much aid as they need and with some lenders, interest rates on private loans may actually be lower that those that come with federal loans. For more on the differences between federal and private student loans, read here.

By now, you should have a ballpark idea of how much college will cost and how much help from family and other sources will be available. Subtract the latter from the former, and you're left with how much funding you'll need to fulfill via loans. As a reminder, it's always best to shop around for loans to make sure that you're getting the best rate possible.

By the time you get all of the information you need, you'll feel equipped to make the best decision for funding your child's education. And if you still have questions about how to pay for school, our Care Team ( is here to help.

For more information on how to take out the loans you need for school, click here.

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