Student Loan Basics

If you are thinking about taking out a student loan, then you need to figure out how much you need. One of the most important things to remember is that a student loan needs to be paid back. While you don't want to take away from your basic needs, you need to remember that taking out too much in a student loan can hurt you in the future because you must pay back that loan. Before taking out a student loan, you need to come up with a budget and plan for your needs.

Here are the key issues you should consider when making this decision:

1- What are your living expenses?

This question involves making a budget that includes all the expenses you incur on a monthly basis. Included in this should be rent, utilities, car payments, insurance, gas, food, child care if needed, other loan payments and any expense that you think you might need on a monthly basis. You'll then need to multiple your monthly budget by the number of months in the school year, usually nine, and then add in the costs of tuition and other college related fees. This will give you a good idea of the total financing you'll need for the year.

2- Are you going to work?

This is a critical factor in deciding how much you'll need and working will allow you to take out much less in student loans decreasing your debt when you are finished. Additionally, for undergraduates, unless you take out private loans, student loan funding is limited and may not always cover all your expenses depending on the college you decide to go to. You might also qualify for work-study, which also gives you valuable work experience. Unless you're planning on only going to school part-time, I don't suggest working full-time. Your main goal in going to college is to get a good education and working full-time detracts from this opportunity.

So you've figured out your approximate expenses for the school year. Here's what you need to do in order to get student loans:

Part 2 - File a Free Application for Financial Student Aid

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