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3 questions to ask yourself before taking out a student loan

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Making college affordable isn't a new topic, but the discussion seems to have taken on greater urgency for families, universities, lawmakers, and businesses.

On March 10 in Atlanta, President Barack Obama announced a "Student Aid Bill of Rights" that would make the process of repaying student loans easier to manage and understand. The White House said 40 million Americans have student loans and more than 70 percent of U.S. students who graduate with a bachelor's degree leave with debt, which averages $28,400.

Debt load isn't a problem for most University of North Georgia (UNG) students, as the average debt at graduation is less than $12,000, but Jill Rayner, UNG's director of financial aid, suggests important questions students should ask before taking out a student loan.

1. Have I tried every alternative before going into debt?

There are a multitude of ways to pay for college, and UNG's Financial Aid Office can help you find them. March 17 is the deadline to complete the Free Application for Federal Student Aid (FAFSA), which is required for applying for financial aid at UNG and most colleges and universities.

Also, check into federal work study opportunities on campus or find out if your current employer has a tuition reimbursement or scholarship program for its employees.

High school students can lower the overall cost of getting a degree by taking advantage of UNG's dual enrollment programs and College Level Examination Program (CLEP) tests to get a head-start on college credits. Students currently enrolled in college also can lower the cost of their degree by registering for 15 credit hours every semester – saving money and time.

2. Would I rather be a starving college student for four years or possibly a starving adult for the next 30 years after graduation?

Know the total amount you are going to owe, including interest, and whether you are going to be able afford those payments. It's easy to say, "I'll borrow this money now and just pay it back later," but when you graduate and want a house, car or family, it is hard to afford those expenses and a hefty student loan payment every month. At the end of every year, staff in UNG's Financial Aid Office give students a copy of the National Student Loan Data Survey information and show them a loan calculator for how much their payment will be just on federal loans – some students are shocked when they see this total.  

While in college, consider cutting other costs as much as possible, including living at home or having roommates. Do you really need the latest and greatest cell phone, music download, video game or coffee drink? UNG's Student Money Management Center can help students create a personal budget that can help keep spending in line.

3. Have I borrowed all of my federal loans before considering private loans?

If a student loan is going to be a necessity, look at federal loans first. They offer advantages over private loans, including:

  • More flexible repayment options
  • Help during periods of job loss through forbearance or deferments
Parent PLUS Loan, which is an unsubsidized loan for the parents of dependent students

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