Note: If you’re using the GI Bill, and it covers 100% of your school’s tuition because you’re attending a public school as an in-state resident, please ignore this post and read another blog post from our site.
The good news –
Congress passed legislation last week to keep the Stafford loan rate at 3.4% for the next year.
The bad news –
1) The Stafford loan rate is set to increase to 6.8% (double the current rate), unless Congress votes to continue the lower rate before it expires at the end of next year.
2) No more grace period. The grace period is the delay after graduation before loan interest starts. Historically, the grace period lasted for 6 months after graduation, which meant that your loan interest didn’t start until 6 months after you graduated.
3) If you’re a graduate student, your loan will accumulate interest immediately while you’re in school. It won’t wait until you graduate.
If you need student loans to help pay for school, you have a few options:
1) Attend a public school in the state where you established residence. Confirm with the school financial aid office that the GI Bill will cover your entire tuition.
2) Attend a Community College. These tend to be much less expensive than a public college or university. You may be able to transfer to a public college or university after you earn an Associate’s Degree.
3) Apply for student aid to decrease the size of the loan you need.
4) Consider working part-time while you’re in school so that you can save money to help pay for your loan.
5) Carefully consider your major. Will the major lead to a career that pays enough to help you get out of debt?
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