When I talk to people in daily life and tell them I am a student loan advocate or a student loan expert sometimes they think I help people get student loans. Now that is all in how I word my introduction you might say but sometimes that is just where their minds wander to. Though I explain that I help people who have left school and have student debt that they want to get rid of, people still ask questions about getting student loans. So from my perspective of knowing all that can happen when you sign up for school, after you leave, throughout your life, and the life of the loan I have written this article to WARN YOU OF WHAT NOT TO DO!
1) Financial Aid Is A Student Loan
This may sound blunt or simple but the honest truth is there are people out there that don’t know this one simple fact and some for profit schools exploit that lack of simple knowledge to use predatory lending practices. That being said the first thing you should know is FINANCIAL AID IS A STUDENT LOAN!
I wrote a separate article talking about predatory lending and the practices that some financial aid offices use to mask the idea that you will have to pay pack your tuition. But it needs to be said, again and again, simple as it may be that Financial Aid = Student loans. You will need to pay back any financial aid you get that pays for your tuition. Unless you receive a grant or a scholarship or some other type of funding that is non-recourse. If not than all the money you receive is meant to be paid back.
This should go without saying as well but take the time to read everything you sign in that financial aid office or over the internet when signing up for school. Ask all the questions you need to, don’t be afraid of sounding stupid, ask until you are sure of everything that you are committing to. I know you or your loved ones are excited about higher education but here is your first lesson; Schools, colleges, technical educational facilities, online courses, and the system of student loans provided by the government itself is all FOR PROFIT! They are in the business of making money by selling education. This means that they are making money in some way by putting your butt in a class room regardless of rather you learn anything at all or not. The school is getting paid for your tuition, it is getting paid to teach you and if you are not paying this out of pocket at the time of the education then more often than not you have a student loan.
Know the interest rates, know where the loans are coming from, are they federal or private? Are the terms good? What are the payback requirements? Are the loans subsidized or unsubsidized?
2) Always Go With Federal Never Private Student Loans
Make sure ALL or as much as humanly possible of the student loans you receive are Federal Student Loans. In my article about “Why Student Loan Freedom Is Possible” I wrote about the unprecedented repayment programs that are available for federal student loans. There are so many different ways to make these loans not only survivable but easy to handle when you understand everything that is available to you (or hire a student loan expert as your advocate, shameless plug). They are flexible, forgivable; take into account your income, family size, where you live etc. Set up correctly directly out of school I can make it so these loans never bother you or slow down your life plans and goals for yourself.
Of course everyone is different and every school has their own requirements for qualifications and tuition. If you can’t qualify for whatever reason for 100% federal student aid (see what I did there?) then you need to look toward private student loans but there are some things you should know before signing on the dotted line
Private student loans are by far the hardest loans to deal with. I don’t just mean private student loans, which are loans from banks or third party lenders, are the hardest student loans to deal with I mean in they are the hardest loans to deal with period in the entire realm of the financial industry. Private student loans are like credit cards that you can’t bankrupt if things go wrong in life. The only thing that you can do is to settle your debt with these institutions at some kind of reduced price but at the ruin of your credit plus you need all of the cash in one lump sum to settle. Other than that they will not budge, they will not let you consolidate, they will not let you fall behind and they do not care about you or your credit or your life, job, family, struggles or anything.
Now some might read that and say “Well that’s no different than any other loan, I can’t tell the bank that I had another kid and to take it easy on my car payment this month.” I agree however these lenders are giving loans to young adults who don’t know any better, sometimes 18 year olds straight out of high school who were never taught anything about money or debt they were just told to go to college to get an education and that is where I get very upset and have chosen to do what it is I do for people
3) Do Not Have Your Parents Cosign Anything!!
When you sign up for financial aid sometimes at some schools for their own qualifications they will want your parents to cosign on the loan. Never do that! You do not want Parent Plus Loans or Parent Loans. They are the second hardest loans to deal with in the world of finance. It may seem fine to have your parents, or you if you are the parent reading this, which have already established credit and “understand” the world of finance put their John Hancock saying that you will pay back the loan. But you just don’t know the future, what will happen over the life of the loan or even what can happen to the school itself while the student is going there.
For whatever reason, maybe it’s because they think you should know better, the federal government has not made parent loan programs flexible. There is only one thing you can do and for that just give me a call because everyone’s situation is different as stated before.
I get calls from students and parents alike from all over the country and my heart breaks when I hear there is a Parent Plus Loan involved. Not only are they damn near impossible to deal with but no matter what the parent is being dragged through the mud and along for the ride for the entire life of the loan. Believe me no one understands more than I do the ups and downs life can bring and how it can affect your financial situation but please before you sign anything make sure you don’t take your parents along for the ride on what could be your rollercoaster of life. So again stay away from those types of loans
To Wrap Up
Other than those three things I can take care of the rest, I can make sure all the payments are affordable for the life of the loan, make sure you get in the right forgiveness program and make sure you never have to pay the whole loan off if you follow these rules. No private loans, and no parent plus loans!
To stay informed keep reading my articles or find College Loan Freedom on Facebook, Twitter, Pinterest, Instagram, Google + etc.
The Student Loan Expert
P.S. Make sure you learn as much as you can when you are in those classes and don’t worry too much about student loans while you’re there, just focus on study and I’ll take care of the rest!