college

In today’s job market there is almost no such thing as getting a good paying job with upward mobility if you don’t have at least a Bachelor’s Degree. Actually, many companies are now requiring a Master’s Degree even for entry level positions. Knowing this, it is important to begin planning for your college education as early as your freshman year in high school. Not only is the cost of education continuing to climb and scholarships and grants much harder to get but also, the top universities are becoming much harder to qualify for.

Some student loans are not as easy to qualify for as they once were so it pays to know which type of student loan best meets your needs, a federal or a private student loan. The earlier you begin planning your college education, the easier it will be to make it through when the time comes.

Why You Should Start Planning in Your Freshman Year

One of the key factors that most of the top universities will look at, according to Louis Hernandez Jr, is your high school history. Yes, your grade point average is important but so, too, are your attendance and extracurricular activities. Universities you apply to will want to see if you participated in sports, band, drama and any social clubs your high school offered. They will see whether or not you were ever elected for student council and will want to know that you got along well with teachers and students alike. Most universities have become highly selective in the types of personalities they see as a ‘fit’ for their school.

Why Your Personal History Is Important?

You may, at this point, be asking why your personal history during high school is so important. There are a number of reasons but primarily because space is extremely limited in many departments. The registrar will want to know that you are going to appreciate the spot you are given but that is only one aspect. The other side of the coin involves student loans and scholarships. A student that was serious about their studies is more likely to buckle down in college and give full attention to their professors and course work. In other words, they will better appreciate the opportunity given for a quality education.

Your High School Career Impacts Financial Aid

The cost of college has skyrocketed within the past few decades and few students can now afford the cost of tuition, books, materials and living on or off campus. Serious students will typically be eligible for a number of different scholarships ranging from getting a full ride through to a specified dollar amount to a specific college or to the college of their choice. Without financial help, most students just couldn’t afford the cost. Then there are student loans which can be applied for, some of which are based on income. Even then, the lender will look at key factors among which is whether or not you are likely to finish your studies, putting you in a position to repay the loan.

Two Main Categories of Student Loans

In general, there are two types of student loans to consider. Federal student loans are backed by the government and are typically deferred until you leave school, whether with a degree or upon leaving early before completing your degree. In other words, you don’t even begin paying back the first penny until you are out of college. The interest on federal loans is typically lower than interest rates on private student loans although you can find some private student loans with rates that are highly competitive. Today, there are even different types of private student loans that weren’t available in the past.

The Four Main Types of Private Student Loans

Today there are more types of private student loans than ever before. These fall into four main categories which include:

1. Paying Interest and Principal 

These are paid while in school and many students simply can’t afford this type of private student loan. With studies taking up so much of their time, it is almost impossible to make a high payment each month that pays towards the interest as well as the principal. The one positive point here is that if you can afford this type of loan, the principal owed will decrease as you continue paying.

2. Interest Only Loan Payments 

Here the principal stays the same while the student continues to study in college but the interest on your outstanding balance is paid during college years. You actually begin paying on the principal once you graduate. This is a lower cost way of making it through college on a budget.

3. Flat Private Student Loan Payment 

This particular type of payment plan actually enables students to pay towards the interest that is accruing with one level, or flat, payment each month. No, all of the interest that is accruing will not get paid each month, but enough to satisfy the lender who is willing to take partial payments on interest. This is how they make a profit for lending you money.

4. Deferred Payments 

As noted above, deferred payments won’t start until you’ve finished with school. This is one of the most common types of loans because most college students simply can’t afford to make payments while in college.

These loans are issued by private lenders who will want to know if you are an American citizen with a credit score of at least 660 and with an annual income no less than $25,000. You can use the money from your loan in any way you want but, of course, most students put the bulk towards tuition. They can’t attend classes unless they do!

So then, along with scholarships, grants, awards and other ‘free’ money towards college, you can also apply for a student loan, federal or private. You can’t go for four years without a place to live or food on the table. Student loans make it possible to make it through college on a budget but you must plan ahead to qualify for the type of assistance you sorely need.