How to Borrow Student Loans Responsibly - Five Ways to Do it Right

Research has revealed that Student loans make up 54 percent of aid for college tuition, making them the largest form of loans awarded to students. With the increase in student loans, the rate of defaults are on the rise, this could be the attributed to the high-unemployment rate or other financial factors. Student loans continue to be an albatross around the neck of many students, every year there is a marked increase in student borrowers. The rise in the increase of students loans coupled with the overall expenses for college has grown faster than inflation. Why is this? Experts contend that more and more students are increasingly taking out a series of student loans, thus compounding the debt ratio. Taking on new student loans only increases your debt, thereby, sinking you further and further into financial crisis. It is straightforward, the more debt you incur, the deeper the debt spiral.

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Student loans will always be with us, unfortunately, borrowing to achieve a higher education is the only way the majority of Americans will reach their goal of earning a college degree. Because we know that borrowing to attend college is not going away, steps to offset the bite of borrowing to attend college should be taken as far in advance as possible to reduce and manage your debt. Here are some steps to you can take to ensure you are borrowing responsibly.

1. Avoid Falling into The Loan Trap - If at all possible, avoid borrowing; however, if you are like most students attending college, you have no other choice but to do so. When it comes time to borrow, do not be tempted to borrow the full sum available to you personally on the loan, loan, of the loan, doing so can give you a false sense of financial security. Often when you get the maximum amount of a student loan, it is usually more than you can afford to repay. This usually happens when students take out a need-based loan. These loans are easy to get, and no repayment is required until after you leave school. If you borrow responsibly in the beginning of your student loan process, the back-end repayment period will be manageable.

2. Know Exactly How Much You Need to Borrow - Know before you go is my motto! When you receive your loan award letter, and the maximum amount it states because you will know in advance exactly how much you need for a given school semester. If you participate in the student work study program or maybe you work full time during the summer. The salary earned from your part time work can be used to repay a little money on the loan.. Also, consider setting aside some of your earnings to pay for the next semester, thus avoiding the need to borrow as much.

3. Only Consider Student Loans with The Best Terms - Remember, the lower the interest rates the lower the loan, which means the less you have to repay: Federal Perkins Loans, Stafford Loans: Federal Family Education Loan Program (FFELD) and Federal Direct Student Loan Program (FDSLP), Free Application for Federal Student Aid (FAFSA), The Federal Parent PLUS Loans for Undergraduates Students (PLUS) Program, Graduate and Professional Student PLUS Loans (PLUS).

4. Scholarships and Grants - Undergraduate scholarship and graduate fellowships are excellent aids to assist students in paying for their education. Unlike loans, scholarships and fellowships can be considered free money since it does not have to be repaid. Thousands of scholarships and fellowships from thousands of sponsors give out every year. Here are some resources to get you started: FastWeb Scholarship Search, College Board Fund Finder, LLC, and Scholarship Search Sites Owned by Education Lenders, scholarship central, Award Database, Next Student Scholarship Experts, Broke Scholar, College Data, Wintergreen/Orchard House Scholarship Database, College NET Mach25 and College View scholarship directory.

5. Military Student Aid is another valuable resource that offers exceptional scholarship opportunities: US Armed Forces Recruiting Programs, Financial Aid for Veterans and their Dependents, Veterans and the FAFSA, HEROES Act of 2003, Books about Military Scholarships and Financial Aid for Veterans. Additional information can be found in the Education section of the web site.

6. Lastly, Private Loans or Alternative Loans - These loans should be your last resort and if at all possible choose another source. You will find loads of information when you start your research, the key is not to let it frustrate and make you give up. Stay focused, persevere and follow through with the mountains of paperwork in a timely manner. If you wait until the last minute, you might find you have to put your dreams on hold until the next semester, and I am sure you do not want that to happen. Make these resources your primary go to for information and you will always up-to-date-information at your fingertips: FastWeb Scholarship Search, Local Public Library and your local College's Aid Office.

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