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Smart Student Borrowing Essential

March 16, 2009

 Smart Student Borrowing Essential 

Experts Recommend Tips for Student Borrowing in This Economy 
WEST DES MOINES, IOWA (March 16, 2009) — As students prepare for college this fall, 
rising costs and the poor economy may have them thinking about student loans as a means 
to pay for their education. As long as students are careful to borrow wisely, student loans – 
especially federal loans with their better terms and conditions – can be a useful tool, 
according to the Iowa College Access Network®
ICAN recommends these tips for smart student borrowing. 
1. Know what you need. Contact the admissions or financial aid office of your 
college to find out estimated expenses for one year. Many colleges list this 
information on their Web sites. 
2. Create a budget. Create a budget showing college costs plus additional 
expenses (like cell phone payments) and expected income (from earnings, for 
3. Apply for financial aid. If you haven’t yet, file the Free Application for Federal 
Student Aid (FAFSA), a free form that may be completed without professional 
assistance provided by the U.S. Department of Education at 
You may qualify for scholarships, grants and work-study programs, which don’t 
need to be repaid. 
4. Search for scholarships. Talk to the school counselor and look for local 
scholarships. Free online searches can match your qualifications to additional 
scholarship opportunities. 5. Make a plan for the shortfall. Determine how much you still need. Then, decide 
whether loans are the best way to cover that amount, considering the repayment 
terms and your future earning potential. 
6. Borrow only what you need. Remember that the more money you borrow, the 
more you’ll need to repay, plus interest. You’ll also likely need to borrow through 
additional years of college. If you can get by a little more cheaply now, it’ll literally 
pay off later. 
7. Consider federal loans first. Federally guaranteed loans generally offer better 
rates and conditions than private loans. 
8. Use private loans as a last resort. If you are confident you can repay the loans, 
even if you fail to graduate or land your dream job, and you’ve exhausted other 
forms of aid, private loans are an option. 
9. Compare private loans carefully. Private lenders offer different terms and 
conditions for education loans, making a side-by-side comparison difficult. 
Consider interest rates, fees and discounts (and how long introductory offers 
last), variable vs. fixed interest rates, payment deferment and reduction 
programs, and penalty clauses. 
10. Get help if you need it. If you have trouble understanding your financial aid 
options, talk to the financial aid office at the college. You may also get free 
assistance through ICAN’s College Planning Centers by calling (877) 272-4692 
or visiting 


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