This is the first article in a series aimed at breaking down and demystifying the topics/issues that arise when it comes to student loans and financial aid. It is my hope that these articles will be a helpful resource for your student financial aid decisions.

Type in “student loan lenders” and you get just over 400,000 articles. “Student loans" pulls in 19 million.  And “Financial aid” gives you  31 million articles!!

I don’t envy students or parents who need to learn about financial aid or have the daunting task of choosing a loan. There is a lot to learn and based on the numbers above I can easily assume that many of you don’t have the time to read that much material.

Well I thought I could help. Drawing on my experience in customer service, I have put together a quick list of some things any borrower should have on the back of their mind when digging into financial aid. Listed are, in no particular order, the most frequent topics that came up when I was working the phones.

1. Education is an investment – very few people can go through college and not accumulate some form of debt. Know this going into your financial aid search. Paying for school can be one of the best investments you make but it is an investment.

2. Realize you are borrowing money – though you may need a loan, realize that it is a loan and like most loans you have to pay it back.

3. The Master Promissory Note (MPN) is a legal contract – signing it states you agree to all terms and conditions of the loan. Don’t sign if have any questions or if you are not sure what type of loan you are signing for.

4. There are different types of student loans – Stafford, Perkins, Subsidized, Unsubsidized, Plus, GradPlus, Health, Private and Alternative Loans are all types of financial aid. Know their differences and get familiar with their specific terms and conditions.

5. Learn the difference between Federal and Private Loans – all loans are not alike but these two are the most different and they have VERY different terms and conditions. If you are not sure what kind of loan you are getting, be sure to ask.

6. Different loans, different interest rates – do you know how the interest rate for a Stafford Loan compares with a Plus Loan? What about a Private Loan? Why is the interest rate for a Perkins Loan ideal? It’s good to know how the interest rates play.

7. Don’t assume that your loan can be forgiven – I’ve mentioned this before but I can not tell you how many times I’ve had to talk to an unhappy borrower who was told or assumed their student loan would be forgiven. You know what they say about assume.

8. Your credit score may come into play – a lot of time customers were not aware or didn’t know that their eligibility of a loan would be determined by their credit score. Depending on the type of loan you apply for, your credit may be a big factor in determining if you are approved. As always if you are not sure ask. It will save you time and stress in the end.

9. Bankruptcy won’t get rid of your student loans – one of to most troubling things I heard a customer say was, “Well I’ll just declare bankruptcy so I won't have to pay you back on this loan.” Guess again.

10. You can get FREE money – student loans are an affordable option but free is even more affordable. Make sure you exhaust all scholarship, grant and other free money options before you go the student loan route.

Helpful Resource: 

Here is a site I came across: http://www.studentloanborrowerassistance.org/get-answers/.  They have a large section of frequently asked questions and provide some solid answers.

So did I miss anything?

What would you add?

Please feel free to comment provide any topics you feel should be included below.

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