College is expensive, and as the resolution on financial literacy just adopted at the 2017 Illinois PTA Convention noted, student loan debt is the largest debt in the country, surpassing even credit card debt. US News & World Report has long been known for their college rankings. With high school seniors and their families making college decisions and figuring out financial aid packages, the site has posted an article about the three things high school seniors should know about student loans. These are:
- You are responsible. Student loans are repayable even if you drop out of college and are often not able to be discharged via bankruptcy.
- You can make payments while in school. Paying the interest on student loans while you are still in school is generally not required, but doing so can significantly reduce the amount of money you owe after graduation. Your family, if also borrowing to pay for your education with a deferred payment loan, should consider paying the interest costs while you are still in school.
- Private and federal loans differ greatly. Financial aid can be confusing, with a variety of savings plans, loans, and grants that vary in availability based on your family’s financial situation. Federal student loans are quite different from and have several benefits that aren’t available with private loans. Families should get the maximum in federal student loans available to them before turning to private loans.
The US News & World Report article goes into each of these three points in more depth, so be sure to check it out. In addition, if your family is still navigating the Free Application for Federal Student Aid (FAFSA) form, be aware that the IRS has recently shut down the IRS Data Retrieval Tool that automatically imported your tax form information to the FAFSA form due to data security issues, so you will need your family’s tax information in hand when filling out the FAFSA. The tool is expected to be available again sometime in the fall.
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