11.28.2006

Funding Education

College is expensive.

Remember the following:

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Research Scholarships

Look into private loans and ask about consolidation

However, private loan rates will vary. Be mindful of the fact that these people are also salesmen. As nice as they seem when they are trying to get you to sign a promissory note, ask questions until you are comfortable with the terms. It's going to be your butt when the loans become due. Don't put yourself in a situation where you find out that you can't defer payments or that missing a credit card payment can put you into default until it's too late. Get things in writing. If the advisor tells you that he/she promises you something, ask him or her to put it in writing so that you can read it over and have it for your records.

Questions to ask or at least somewhere to start:

1. What is the interest rate associated with this loan?
2. When is it dispersed? Can I have it dispersed in a lump sum? Is it dispersed several times a year? Like once a semester?
3. When will I have to make payments?
4. Can I make payments early? Will that be applied to the principal amount of my loan or something else?
5. Is there a grace period after I graduate that I don't have to make payments? If so, will interest accrue during that time?
6. What happens if I cannot find a job after college? Can I make a request to delay payments for a period of time? (temporary cessation of payments known as forebearance).

You can shop around with different lenders. Don't feel like you need to commit to the first lender you speak with. Again, these people are salemen. Many of these individuals make a commission for every person they sign up. There may be pressure to sign up for something. You don't have to. It is in your best interest to get a loan with a provider who has answered your questions thoroughly and makes an effort to make the process as pain free as possible.

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