<p>I'm not really savvy with financial things like loans, so trying to figure out which one to get is proving to be a bit of a headache for me.</p>
<p>I found this nice little comparison chart (FinAid</a> | Loans | Private Student Loans) for available loans, but I can't really make heads or tails of it since all of the information is pretty much foreign to me.</p>
<p>It'd be great if someone could help a sister out and give me the run-down on these types of things (lingo, what to look for in a loan, etc.). As it stands right now, I'll be needing about $10-11K per year (if you wanted to give your personal opinion on which loan would be best).</p>
<p>Many thanks!</p>
<p>That’s $10,000 per year on top of full Staffords? So you’ll leave college with about $65,000 in debt?</p>
<p>Do you have a co-signer that’s agreed to take responsibility for the debt? You won’t be approved for any of those loans without one.</p>
<p>Unless you are an older student with a work history you will most likely need a co-signer for private loans. So probably more important to figure out who the cosigner is than which loan to “choose.” These days, sadly, it’s more about financial institutions choosing you than you choosing financial institutions for loans.</p>
<p>Also do yourself a favor and run loan calculators so you understand what the payback terms are going to be and make sure you absolutely want to go that route especially if you are a soon to be college freshman. If so it might make more sense to do 2 years somewhere you can afford and transfer for the final two years with loans. You’d hate to run out of money before you finish your degree.</p>
<p>My dad will be cosigning. </p>
<p>And as it stands, I’ve got this for yearly aid:
Michigan grant: $6,342
Work Study: $2,500
Perkins loan: $1,000
Federal subsidized: $3,154
Federal unsubsidized: $2,346</p>
<p>So, yeah. I’ll be in quite a bit of debt.</p>
<p>This is something you should think about really, really carefully. You have to consider the amount+interest that you’ll be in debt in. If you need an extra $10K this year, what about the next 3 years? How easy will that be to get? Most importantly, how easy will that be to pay off? You’re talking an extra $40K total (without interest) just in private loans. I hope you’re shooting for a career that’s in really high demand with high entry-level salaries…</p>
<p>I don’t mean to be mean or scare you, but this is a really critical issue that not a lot of college kids take seriously. Then they get out and we read these articles about how people find themselves in $100K worth of debt and are not sure how they got there. It’s more important to be aware of what you’re doing and know how you’re going to pay all this back now instead of finding yourself trapped a few years down the road.</p>
<p>Also make sure you have a serious conversation with your dad about this. Let him explain to you what this is all about and maybe sit down with a financial advisor too. Make sure that he’s okay about co-signing and will be able to co-sign on this for the next three years as well.</p>
<p>Honestly the general rule about private loans is don’t rely on them, especially if you’re talking about an amount this large.</p>
<p>Michigan’s tuition increases as you increase from underclassman to upperclass so you need to factor in both tuition increases that you know will occur and tuition increases that might occur in this economy. You need to ensure that you and your dad will qualify for this large of a loan (over the 4 years.) Remember your degree is granted from the college you graduate not the college you start. And absolutely run the payment schedule. Even a high demand, high paying starting salary in say engineering is still around $60,000 a year and many, many college undergrads will find starting jobs in the $30s maybe, maybe low 40s and there’s a good chance that the payments on private loans could commence before you even secure that job. Proceed with extreme caution.</p>