Credit pros advise caution applying for student loans

Sep 13, 2012, 7:09 AM | Updated: 7:09 am

PHOENIX — Students planning for college may be looking for a way to pay for higher education, which could mean taking out a student loan.

The Credit Counseling Services at Take Charge America is urging potential applicants to consider several questions before applying for that loan.

One is ‘Will the career you’re planning to pursue pay you enough money to pay off that loan?’ Another question is ‘Have you applied for a scholarship?’

“You want to eliminate as much debt as possible,” Mike Sullivan of Take Charge America said. “Look first at scholarships. Look at grants. Look at money that does not have to be repaid before you think about borrowing.

“By far, the majority of students should be looking at the least expensive way of getting college credits and finding out what kind of a career option they really have,” Sullivan said.

Here is Sullivan’s complete list of suggested questions that students should ask before applying for a loan:

• What career are you planning to pursue? Consider your future salary and ability to pay off the loan. If you’re pursuing a profession with limited earning potential, it doesn’t make financial sense to take out a big loan you’ll have difficulty repaying.

• Do you plan to attend a private university, state school or community college? Consider the affordability of your education. While your heart may be set on an exclusive private university, it’s critical to evaluate the benefits, costs and available options. The allure may not be worth the reality.

• Have you applied for scholarships or grants? As a general rule, exhaust scholarship and grant possibilities before applying for loans. Your school counselor or financial aid office can provide resources. You can also find scholarship databases online.

• Have you completed a FAFSA? Anyone heading to college should submit the Free Application for Financial Student Assistance (FAFSA). You may be surprised to learn you’re eligible for some funding, even if you or your family are not considered “low income.”

• Have you researched your federal loan options? If you need to borrow money, federal loans offer fixed-interest rates, flexible terms and borrower protections that aren’t usually available with private loans. Perkins and Stafford loans are typically the best bet. Graduate students and parents of undergraduates can apply for a Federal PLUS.

• Have you done your homework on private funding? If you must turn to private funding, research the best private loans for your financial situation. Factors to consider include: interest rate before and after graduation, loan fees, terms, due date for first payment and monthly payment amount.

We want to hear from you.

Have a story idea or tip? Pass it along to the KTAR News team here.

Arizona News

(Getty Images Photos)...

Beck, French band Phoenix bringing co-headline tour to Footprint Center

Eight-time Grammy-winning artist Beck and Grammy-winning French band Phoenix are scheduled to appear at Footprint Center on Aug. 11.
8 hours ago
(Wikimedia Commons Photo)...

Scottsdale police say 2 more cars targeted with Molotov cocktails

Police in Scottsdale said Thursday two more cars were targeted with Molotov cocktails in the past week, bringing the total to four in January.
8 hours ago
Sarah de Carvalh, CEO of It's a Penalty. (Photo by Brittany Murray/Getty Images)...
Colton Krolak

Survivor, advocates bring awareness to human trafficking prevention in Arizona

A survivor and advocates in Arizona discussed how to spot signs and be better educated during national Human Trafficking Awareness Month.
8 hours ago
(Photo by Justin Sullivan/Getty Images)...
Kevin Stone

Here’s what Valley economists say about possible Phoenix housing market plunge

Local economists are saying a recent report projecting a 2008-like plunge in the Phoenix housing market is no reason to panic.
8 hours ago
(Arizona Department of Transportation Flickr Photo)...

4 metro Phoenix freeway closures to hinder drivers this weekend

Drivers across the Valley could face delays this weekend as portions of four metro Phoenix freeways will be closed.
8 hours ago
(Facebook Photo/Doggie Street Festival, Visit Mesa Photo)...

Weekend guide: Here are the biggest events around metro Phoenix for Jan. 27-29

There'll be plenty to do in Phoenix this weekend, including pet-friendly festivals, the Barrett-Jackson Collector Car Auction and trips to museums.
8 hours ago

Sponsored Articles

Day & Night Air Conditioning, Heating and Plumbing

Prep the plumbing in your home just in time for the holidays

With the holidays approaching, it's important to know when your home is in need of heating and plumbing updates before more guests start to come around.
(Desert Institute for Spine Care photo)...

Why DISC is world renowned for back and neck pain treatments

Fifty percent of Americans and 90% of people at least 50 years old have some level of degenerative disc disease.
Children’s Cancer Network

Children’s Cancer Network celebrates cancer-fighting superheroes, raises funds during September’s Childhood Cancer Awareness Month

Jace Hyduchak was like most other kids in his kindergarten class: He loved to play basketball, dress up like his favorite superheroes and jump as high as his pint-sized body would take him on his backyard trampoline.
Credit pros advise caution applying for student loans