COLLEGE FUNDING & FAFSA
Understanding Student Loans Before You Borrow.
If you must borrow, borrow smart. Here is what to know first.
Not all student loans are equal. Before you sign, learn which loans protect you and how to borrow as little as possible.
Borrowing is a big decision. Understanding student loans first helps you avoid debt you will regret. The golden rule is simple. Use free money first, then federal student loans, and treat private loans as a last resort.
What kinds of student loans are there?
Two main kinds. Federal student loans come from the government and offer protections like income based repayment. They can be subsidized, where the government covers interest while you study, or unsubsidized, where interest builds from the start. Private loans come from banks and usually lack those protections.
Always borrow federal before private. The protections matter if life gets hard later.
How much should I borrow?
As little as possible. Federal limits for dependent students are 5,500 dollars as a freshman, 6,500 as a sophomore and 7,500 for junior and senior years. Just because you can borrow a limit does not mean you should. Borrow only what out truly need.
A smaller balance now means a lighter load after graduation. Future you will be grateful.
Related college funding pages
TAKE THE NEXT STEP
Ready When You Are
Borrow smart, or not at all. Get free help planning your funding now.
Frequently Asked Questions
Federal first. They offer protections like income based repayment that private loans usually do not.
On a subsidized loan the government covers interest while you study. On an unsubsidized loan interest builds from the start.
Federal limits for dependent students are 5,500 dollars freshman year, rising to 7,500 by junior year. Borrow only what you need.