Responsible Borrowing

Even with savings, gifts from family, and scholarships and grants you may find that you need additional funding to pay for your higher education.

Student loans can make up the difference between what you have and what you need to make your college dream a reality. Unlike scholarships and grants, however, borrowed money must be repaid - most often with interest - regardless of whether you complete your education or not.

How you manage this debt can affect your credit rating and your ability to borrow later on for a house, a car or anything else. Defaulting on a student loan can damage your credit history for up to seven years.

Should you have trouble making your student loan payments, a deferment will allow you to postpone payments for reasons such as unemployment or disability. A forbearance is an agreement with your lender to postpone payments when you are having financial difficulties but are not eligible for a deferment.

For more information, see Deferment & Loan Forbearance information. Otherwise, to combine your student loan payments into one manageable monthly payment, you may want to consider loan consolidation.

Borrow only what you need. Loan counseling can guide you through the federal requirements you must meet to borrow a Stafford loan, and help you better understand your repayment options. The loan counseling process includes an Entrance Interview when the student begins college and learns about his/her loans, and an Exit Interview, which take place upon leaving school and covers repayment.

Estimate the amount of debt you can afford. Use the repayment calculator to figure how much you'll need to make your monthly loan repayments once you graduate.

Understand your borrowing agreement fully - including all interest calculations. Our student loan glossary can help you understand all the terminology you may encounter in the financial aid process. It covers everything from accrued interest to variable interest.

Stay on schedule! Repaying a student loan on time can create and build an excellent credit history.

If you can prepay a student loan, do it! You won't incur any penalties, and you'll save on the total interest due.