Going to college is an important step for many people. It can help them accomplish their dreams and fulfill their career goals. In order to get into the profession of their choice, they may have to attend undergraduate, graduate and an even a Ph.D. program. While school can be enjoyable, it can also be very expensive.

In 2017, the average student left college with $37,172 in debt. The total student debt in the United States was $1.4 trillion, and the average cost of a four-year university was $34,740 for a private school.

It’s important to get an education, but students need to make sure they can actually afford it. They should only sign up for student loans they can confidently pay back on time, or else they are going to drag out their debt for years to come. First, it’s crucial to do a student loan comparison of the different types of private and public loans.

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Student Loan Comparison: Federal Loans

To take out a federal student loan, students first need to fill out the FAFSA, or the Free Application for Federal Student Aid. After they do that and receive a response from the federal government, there will be a few options for federal student loans. These are generally lower than private ones, offer flexible payment plans and loan forgiveness programs and provide consolidation if students have a few federal loans.

Not all federal loans are the same, which is why it’s important to do a student loan comparison of them. Stafford loans, or direct subsidized federal loans, are for students who demonstrate that they need financial assistance. The interest rate is 3.76 percent for graduates and 5.31 percent for postgraduates. Students can borrow $5,500 to $12,500 for undergrad and up to $20,500 for grad. The federal government will pay for the interest that builds up on a loan while students are in school at least half the time.

With an unsubsidized loan, students’ interest is not covered. The interest and borrowing rates are the same. Direct PLUS loans carry an interest rate of 6.31 percent, and borrowers have six months post-graduation until they need to start repaying them. Parent PLUS loans are for biological or adoptive or stepparents to pay; the interest is 6.31 percent, and payments must be made while children are still in school.

Direct consolidation loans allow students to put all their federal loans together and make one monthly payment. The interest rate is the weighted average of the interest rates on the loans you already took out. When deciding which federal loan to pursue, students should look into a student loan calculator to total up what their payments will be.

Student Loan Comparison: Private Loans

Private loans, which are offered by private student loan companies and banks, may be better options for students. Students may also have to resort to private loans if they were not given any federal loans. With private loans, interest rates vary, cosigners are usually required and different repayment programs are available.

There are many different banks and student loan companies out there. College Ave student loans, for example, allow students to make $25 monthly payments, defer payments until after graduation and make full principal and interest payments. One of the College Ave student loans offers a fixed interest rate of 4.73 to 12.94 percent and a variable interest rate of 3.99 to 11.98 percent. The minimum credit score to qualify is low 700s.

A Citizens One private student loan has a fixed APR of 5.25 percent to 12.09 percent and a variable APR of 4.45 to 12.34 percent. With a SunTrust private student loan, students need a minimum credit score of 600 to qualify for a variable APR of 4.25 percent to 11.30 percent or a fixed APR of 5.25 to 12 percent.

If students have a minimum credit score of 680, they may qualify for an Ascent private loan, which has a fixed APR of 4.98 to 14.16 percent, as well as a variable APR of 4.23 percent to 13.23 percent. A Discover private student loan has a fixed APR of 5.99 to 13.99 percent, and a fixed APR of 4.24 to 13.24 percent.

Succeeding With Student Loans

While doing a student loan comparison is critical, it’s also important for students to have a plan of action for paying back their loans. They should never ignore their debt, but instead pay at least the minimum every month. Students should also read all the fine print on a loan before signing. For example, they don’t want to get charged for repaying the loan back early, which does happen.

Students should be prepared to make sacrifices, such as cutting the cable cord, living in cheaper off-campus housing, surviving on ramen noodles and working a part-time job while they are still in school. They should also take advantage of student discounts at local businesses and take rideshares and public transportation instead of signing up for costly car payments.

To track expenses, students can download an app like Mint and start a budget on an Excel spreadsheet. They can set limits on their spending and mostly focus on needs instead of wants. They can either pay off their lowest debts first using the snowball method or pay off higher-interest loans initially.

Students should avoid credit cards at all costs. They are only going to put more financial pressure on students since they often come with high interest rates. Relying on credit cards or other private loans is never a good idea when trying to pay back student loans.

Additional Student Loan Advice

When signing up for student loans, students need to look into the best repayment options. For example, they may get charged less interest in they pay back loans while still in school. Students should also pay back loans while they are still in school if possible because it puts less pressure on them to find a job right away after graduation.

Some jobs provide loan forgiveness plans or loan payment plans as part of their benefits packages. Recent grads should seek out these kinds of jobs to help with their student loan debt. Signing up for automatic payments can also keep them on track in case they are bad with keeping due dates in order. Students can focus on one small chunk of debt at a time instead of looking at the big picture; that way, they don’t get overwhelmed and will be more likely to succeed with their debt repayment plan.

Just because students get jobs right after graduation, it doesn’t mean they should change up their lifestyle and start living as if they have a lot of money. Living frugally – which means limiting eating out, not spending money on entertainment and clothes and finding a cheap apartment – is going to help them until all their loans are paid off.

When students are looking into college, they need to decide whether or not they want to invest in a private school education or a public one. They also need to figure out a plan of repayment before signing up for a loan. With a little bit of research and sacrifice, students can get the education they need and set themselves up for a bright future ahead.

About the Author

Kylie Ora Lobell is a freelance writer in Los Angeles. She has written about education for topics for LegalZoom, Jewish Journal of Los Angeles, Cornerstone and WeWork.