Planning for College


Overall, when planning for college it is best to stay away from all loans if possible. However, given the rate at which tuition for colleges is increasing, that is hardly an option now, even if you are given a large amount of scholarships as well as grants for your college education. If you do end up needing loans to subsidize your college education, it is imperative that you read all of the stipulations prior to acceptance. It is easier to obtain student loans with high interest rates than it is to breathe air. Almost anyone will offer student loans: the government, credit card companies, banks, family members, etc…

Bank Loans

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Getting a loan from a bank is a very bad idea. In order to get a student loan from a bank you must have a good history with them or a great credit history. The interest rates are very high and generally students entering college do not have the credit history to qualify for such loans, which means you will need a co-signer. Having a credit card can be useful, but not for paying off college tuition.

Credit Card Loans

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Private student loans from a credit card company will accrue tremendous interest rates that utilize the highest legal interest rates. You will spend more time paying off the interest than you will the debt. It is easy to apply for a credit card loan for college, but these fall into the category of which college loans you should stay away from.

 Private Student Loans

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Private student loans can be good at times, unless the interest rate is high and the stipulations of the agreement do not work in your favor. No private student loans should be taken out which must be repaid while you are still in school. There should be options for deferment and forbearance on college loans that you take out, so that you are not stuck with defaulting as the only option when you are in a tight spot or move onward to graduate school.

Government Loans

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For Stafford loans, you do not accumulate any interest while you are in school at least part time and once you stop going to school or graduate, then you have a six month grace period before the payments are due. The acceptance for these loans is not based on credit, unlike a credit card or bank student loan. The interest rates are quite low, generally below four percent and you are able to borrow up to twenty thousand dollars per year, generally offsetting the whole cost of your tuition. Once the payments are due, you can ask for a deferment if you are enrolled in graduate school or you join the Peace Corps, then your payments will be delayed so long as you are doing those things without accruing additional interest. If you find that getting a job during these current economic times, then you can enter into forbearance, which means that no payments are due, but that during said time you will still accrue interest which will be added to the total amount due upon the end of the forbearance period.


There are many available loans for students from a variety of sources. These include banks, credit card companies, private companies, family, and the government. However, not all of them are good. Overall, if you must take out a loan, stay away from ones offered by credit card companies, banks, and private companies and lean toward government affiliated Stafford loans.