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Plan Well, Retire Well

Saving and investing your money

The Student Loan Chronicles: What is it?

Last month I wrote a post about starting the student loan chronicles. For those of us paying back student loans, this is usually what it feels like. You get paid, then your loan is due a few days later, and you feel like all of your money is gone! By knowing what a student loan is, and how they work before you get one, may actually help you in the long run!

What is a student loan?

According to the Financial Student Aid Office, a loan is "money you borrow and must pay back with interest." This sounds simple enough! Until you see that you can borrow from the federal government, the state you live in, your school, non-profit organizations and even private lenders! Where does someone start? By applying for the FAFSA! (See more below!)

How do they work?

Applying for the FAFSA (the Free Application for Federal Student Aid) can help you know if you're eligible for student loans, aid, or even grants. One way, is to try out the FAFSA4caster. It's an online tool that can be used to find out a student's eligibility for aid. This tool is for those who aren't ready to file for the FAFSA (students who may be looking at college, but haven't graduated or accepted attendance at a university or community college!) If you're a parent, or a high-school student, knowing how much your tuition is going to cost will help you decide how much aid you need, as well as knowing how much you can afford as well.

If you're a current student, entering college, you should go ahead and apply. The deadline for application seems to change, so check here and find out when you need to apply. One thing to remember is that as a college student, you don't need to take the whole amount of aid they offer. A while back, I wrote a guest blog post for the Office for Financial Success at the University of Missouri about limiting your student loan liability.

Student loans are a complicated subject! This is just the second of many blog posts, so stay tuned for more information! If you have a student who's ready for college or repayment, watch our hour long webinar on student loan repayment!

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