If your family is like many, chances are you’ll need to finance at least some of your college costs with a variety of college financing solutions. Making a plan before you borrow may help reduce the amount you’ll repay with interest. Consider making a plan for all the years the student and any additional children will be in college.
Many families use a combination strategy of past income (savings), present income (interest-free monthly payment plan), and future income (student loans for college) to cover college costs and minimize borrowing. Many colleges offer interest-free monthly payment plans that allow you to split your bill into smaller, more manageable payments over 5–10 months. This is an excellent option if you don’t have the resources to pay your bill as a lump sum. Plans generally begin in June and may require a minimal enrollment fee. Contact the college bursar’s office for more information.
Ways People Fund Higher Education Expenses
Learn more about paying for college and managing your money while you're a student.
Before borrowing for college, consider federal student loan options, especially the Federal Stafford Loan for students. These student loans for college have some of the best terms and repayment options for students. Talk to your college or university if you’re interested in borrowing a federal student loan.
If you decide to borrow, shop around for the best student loan for your needs, and be sure you understand the basics about student loans:
A loan advertised as a student loan for college may still require a co-borrower. Many of these loans also charge a higher variable interest rate.
A co-borrower is equally as responsible for a student loan as the primary borrower, in most cases. Many traditional private education loans require a co-borrower. Make sure all borrowers on the loan understand how the loan will be repaid, and keep all addresses and contact information current.
Deferred student loans will cost more than immediate repayment loans. Your monthly payment may be lower by borrowing an immediate repayment education loan, and the overall cost will be significantly less.
Variable interest rate loans will likely increase as interest rates begin to rise in the economy. Most fixed interest rate loans charge the same interest rate and monthly payment for the life of the loan, regardless of changes in the credit markets.
Fine print matters! Student loans aren’t one size fits all, so be sure to research and ask questions to help you decide which loan product is right for your financial situation.
Download a tips sheet, including our Education Loan Comparison Chart.
