Strategic Borrowing
Learn Which Loans Offer the Best Terms
The loan process may appear complicated, but there are ways of approaching it that can save you and your family money. You want the least expensive loan possible.
Exhaust Subsidized Options First
The loan with the lowest interest rate is generally the least expensive. The lower the interest rate, the lower the total cost.
Here’s the list, starting with the least expensive:
- Federal Perkins Loans
- Federal subsidized Stafford Loans
- Federal unsubsidized Stafford Loans
- Federal parent PLUS Loans
- Private (alternative) loans
Learn more about each of these college loan options.
Compare Loans
Which of the loans you're considering will cost you the least in the long run? Use the Student Loan Comparison Calculator to compare specific loan offers. The calculator uses interest rates and other details to determine the total cost of each loan.
Find out if you have access to a special loan source (like the Air Force Aid Society); sometimes the terms of those loans are as favorable as those of the Perkins or subsidized
Know Your Limits
You don't have to borrow the entire amount shown in your award letter. Use the Student Loan Calculator or Parent Debt Calculator to figure out how much your family can afford.
Avoid the loan trap. Need-based loans are easy to apply for and don't require payments while a student is in college. Don’t be tempted to borrow the maximum amount if it's more than you actually need and more than you can afford to repay.
Explore Ways to Reduce Your Loans
If you decrease spending or bring in more money, the amount you have to borrow goes down. Find tips on reducing college costs.
