Somehow, I think most counselors never print this list up while they chat up the kids on college.

1. Research what aid is available to you—including scholarships, state and federal grants, and then federal loans. Meet with your school’s financial-aid counselor to learn these options. Visit the government’s website. The private website http://www.Finaid.org also has good resources.

2. Know the terms of your loans. What is the interest rate, what is the repayment period, and when precisely will payments begin? More importantly, find out what your expected monthly payment will be upon graduation. The financial aid counselor should be able to provide this. Also, learn about the federal government’s income-based repayment program.

3. Once you take out loans, be aware that this debt will not go away until you pay it. Federal loans are often called “aid,” but they are not grants—they must be repaid. Also, it is extremely difficult to discharge student loans—federal or private—through bankruptcy. If you don’t make payments, a mark will show up on your credit report, lowering your credit score. And the government could ultimately garnish your wages to recoup the debt. Also, if your parents co-sign on the loans, they are on the hook, too.

4. Look up information on your institution. Don’t just find out your school’s overall ranking or graduation rate. Also look up its “three-year cohort default rate,” a figure intended to show how many students pay back their loans within three years of graduation. That reflects how many students from that school are finding work and decent pay. Information on your school, including default data, can be found here.

5. Look up the earnings potential of your major. This website has information on different careers, including average salaries. Consider whether your debt load is too high relative to the expected earnings of your chosen field.

via 5 Things to Know Before Taking Out a Student Loan.

Reality check please.

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