Each year, thousands of students take out loans to help make paying for their tuition and schooling easier. This includes: books, tuition and fees, housing, etc. Taking out a loan or multiple loans for college is a decision that every student is faced with at least once during their collegiate career.
First and foremost, it is important to evaluate why you believe that you need to take out a loan. Student loans are not a game or a joke. Student loans are serious, as they have the potential to follow you throughout your entire life.
You should only be taking out a student loan if it is absolutely necessary. You should use this money only for school-related purposes and you should be knowledgeable about interest rates and your repayment options. Keep in mind that your loans must be repaid with interest. Meaning that if you take out a loan for one thousand dollars, you are not only paying back that one thousand but also any interest that was accrued. (Your first payment for your loans are due six months after your graduation date. E.g.- If you graduate in May of 2017, your first payment will be due November 2018).
There are two types of federal student loan options that students can receive when they sign in to their SDSU Aidlink Accounts: Subsidized Federal Direct student loans and Unsubsidized Federal Direct student loans. I have personally taken out both subsidized and unsubsidized loans but it is necessary to understand the difference between both types of loans before you take them out.
Subsidized Federal Direct loan: This loan is based on financial need and is the best option if you are taking out a loan. The reason that this is the best option, is that interest is paid by the U.S. Department of Education while you are in school. Since the interest is paid while you are in school, interest payments will not accrue until six months after you graduate. In order to be eligible for this type of loan, you must be enrolled as an undergraduate student and must be taking a mimimum of 12 units.
Unsubsidized Federal Direct loan: This type of loan is not based on financial need, meaning that any student, regardless of financial status, can take out an unsubsidized loan. The downside to an unsubsidized loan is that it accrues interest starting from the date that the loan is disbursed. While you are not required to start making payments until after you graduate, the interest that you accumulated throughout the rest of your schooling is added to the total amount of your loan.
Don't feel ashamed to take out a loan. If you really need financial help and your parents do not have the means to help you pay for college, you can fall back on a student loan. While working and going to school at the same time is neither fun nor ideal, consider getting a job before taking out a loan. Thousands of students, including myself and the majority of people I know, have had a job since their freshman year in college. Lastly, always remember that taking out a loan is serious and to use your money wisely.
