How to go about getting student loans

Landing that college acceptance letter is only half the battle when it comes to attending a university — you still need to find a way to pay for it.

With something like 40 million Americans juggling student loan debt, it’s no surprise that paying for school with a loan is a popular way to handle those fees. Before getting too far down the rabbit hole, here are six things to keep in mind:
1. Your loan will either be federal or private

Loans come with different terms and conditions, but in general a student loan will come in one of two forms — federal (funded directly by the government) or private (from individual lenders like banks and credit unions.). Federal student loans tend to come with across-the-board incentives like fixed interest rates and the ability to restructure payments based on income, but with a little research, you may be able to find a private loan with lower interest rates. However, it’s better to maximize your federal student loan options first before tangling with private loans.
2. Short means less, long means more

When it comes to repaying your loans, the faster you agree to pay off your debt, the more you’ll likely pay per month, but you’ll be spending less in interest over the life of your loan. Conversely, if you decide to make smaller payments towards your debt over a longer period of time, you may end up paying significantly more interest over the years.
3. Get to know your grace period

A grace period is the set of time you can wait to make your first loan payment. Unfortunately, not all loans come with the same grace period, which means you need to be sure to know the due date of your first payment. Grace periods are helpful if you’ll need time to get a job and earn a couple paychecks before making payments. But you don’t have to wait until the grace period is up to make your first payment. Making payments during the grace period can offset some of the interest accruing.
4. Deferment and forbearance may help in times of need

Again, every loan is different, but it’s not uncommon for you to need to take breaks in payments from time to time. Forbearance and deferment can help in these situations. Forbearance, for example, allows you to either stop making loan payments or have them reduced for a certain amount of time, but interest will likely still accrue. Deferment allows you to stop making payments on both principal and interest for a number of specific reasons. The government may subsidized your interest while in deferment if the loans are Federal Perkins, a Direct Subsidized Loan or a Subsidized Federal Stafford Loan. Check with your loan to see if one or both is available to you, and what the circumstances must be to qualify.
5. There’s a difference between refinancing and consolidation

Besides getting debt free, you probably want to focus on one other factor: paying less each month. Two options to help with this are consolidation and refinancing. Consolidation is the act of combining all of your loans into one payment with an interest rate that will likely be an average of your existing loans. Consolidation simplifies your payment process, but doesn’t necessarily reduce your debt burden. Refinancing uses a new loan (hopefully with a lower interest rate) to pay off your existing debts. You’ll then make a single payment per month towards your new loan. The lower interest rate can help you dig out of debt faster. You’ll need to do a little research to determine which is best for your particular situation. (This piece can help you decide if refinancing options might be good for you, while this one talks more about debt consolidation, and the pros of going that route.)
6. Is Taking Out a Student Loan Even Worth It?

It’s not an easy question to ask yourself, but it’s one worth considering — will the amount of money you’re projected to make from your career be enough to pay off your student loan debt? For example, some lower paying jobs may not actually end up being worth the price you’ll pay in the end. Before you sign on to any loan, do the math to determine how long it will take you to pay back that loan at the average salary you’re meant to make in your job, and determine whether or not you’re willing to be in debt for that amount of time.