College Loans: Helping You Reach Your Goals
Half of all full-time undergraduates in the United States take out federal student loans each year, adding up to about $57 billion. In fact, more students and their families depend on federal college loans than any other source of financial aid. If you're unable to meet all your college costs through other means like scholarships, current family income, and savings, then saying yes to a college loan can be a smart move.
Invest in Your Future
Running up credit card debt to buy items like clothing that lose value is a poor use of credit, especially for students. But borrowing for college is generally a different story: when you take out a college loan, you invest in your own future. As an investment, college yields generous economic and personal returns. Once you graduate from college, your career opportunities and earning potential will increase significantly. What you would lose in earnings and opportunity from not going to college is almost always much greater than the interest you'll pay on college loans.
Advantages of Need-Based Loans
When you take out a college loan, you invest in your future. In one sense, education loans are just like any other form of credit: you must repay the money you borrow—with interest. However, the terms and conditions of need-based federal college loans (the Perkins and the subsidized Stafford) make them uniquely attractive.
If you qualify, it's almost always a good idea to make these your first-choice loans. Here's why:
- They have low interest rates, making them less expensive than other loans.
- You don't need a credit history to qualify.
- They're flexible. For instance, no payments are required while you're in school and up to six months after you graduate.
The Test of Time
Since the early 1950s, college loans have helped millions upon millions achieve their dream of graduating from college. They have stood the test of time as reliable, consistent funding sources, helping students attend the college of their choice.
There are many kinds of college loans. Learn how to tell them apart in College Loan Options.
