Financing your education

One of the most important decisions you can make in your life is to decide how to pay for your education.

Education is a very big thing for all of us and is the key to our success.  Often this “big thing” is ignored because of financial problems, and having the option to look for a grant or scholarship. Just as you investigate which schools have the best programs for you, it is still necessary that you gather information about the best possible way to finance your education and your future.

Invest if you can, but be careful!

Education is a major investment in yourself – both in time and money.  You may be spending your limited financial resources in the hope that you will realize a somewhat positive outcome, upon finishing the studies and return the invested in the education fees.

There are banks, lending companies or persons you know who will support you, you can borrow the minimum amount necessary to fulfill your education aims. Through this way, you will be able to realize your financial and career goals, as it maximizes the net return on your investment.

It is also necessary that you consider some preparations for the financial aspects of your school, just as you are preparing for admission to and enrollment in the school of your desire.  Even if your parents may be willing to carry your financial paperwork or any financial burdens, it is best that you understand the value of the money spent and become a participant in financing your education, as per your available resources.

Questions to ask before you borrow

Before you borrow, it is necessary that you get answers to all important questions regarding the financing of your education.  You should consider are the following:

  1. What shall I do to get ready for meeting the cost of my education?
  2. Are there eligibility requirements that I have to meet, in order to obtain support for my degree?  If  there are such, which are they?
  3. What specific financing alternatives or programs are available for my needs, at the school where I plan to apply?
  4. How to apply for financial support and what applications are needed?
  5. Is there a right time to apply for financial aid, when is it and what are the application deadlines?
  6. Will my parents be expected to provide any of their financial information background or contribute to the cost of my education?
  7. What they will do with the information that I will provide on my behalf?
  8. Which are the necessary and the unnecessary points that I should know about the assistance I am offered: like student loans, grants, or work study?
  9. Is there any move that I can take to lower the amount I have to borrow, and still attend the school of my choice?
  10. What do I need to consider or do when I arrive on campus to minimize how much I borrow?
  11. What choices will I get for getting a job, while attaining my degree?
  12. What possible impacts will the loans have, after I graduated from college?

Some of the above mentioned questions are general and they apply to any school you might attend. But there are more specific ones related to the programs, policies and procedures of every school. What is best to do with these questions, aside from seeking answers, is to evaluate the issues as you explore your financial options, in spite of where you plan to attend school.

It is worthy noting that financing your education requires a collaboration involving yourself, your family, the school you attend and your lender. Answering such questions will provide you the information you will need to make well-informed choices about how to finance your education, other than how to make the most of your education investment.

Where to look for answers?

One of your most important resources in answering the above mentioned questions is the financial aid administrators at the schools you are considering.   There are also some consultation publications from funding organizations where you can seek for answers (state governments, lenders, scholarship granting organizations, financial aid guidebooks and web portals with this type of information).

Several websites have been established by government agencies and other organizations to aid students with financing their education are now accessible and they are a good place to start your search.

How much money should you borrow?

Let’s say you have found answers to those questions and it is necessary to note that before you place and strike your pen on any promissory notes, you should first take an organized step and identify how much money you will really need to borrow.

There are several factors associated with the actual amount you should borrow.  The amount will greatly depend on the cost of attendance as established by your school, on the student loan limits established by the federal government and other student loan lenders, on your outstanding financial commitments, other resources you may have and on the amount of the debt you can afford to repay once you leave school.  The sum of these parts equals an educated estimate of your student loan amount.

Factors to consider for the actual student’s loan

Under accepting standards of borrowing for a student’s loans, it is stressed that you can borrow up to the cost of attendance, as determined by your school, or less from the financial assistance you might be receiving. Other financial assistance like grants, work-study and scholarships are more than welcome if you can accommodate your needs within them.

Note that the costs of attendance typically involve: tuition, books, fees, room and board, and other miscellaneous living expenses.

It is best to borrow the minimum amount possible, so that you can lessen your overall financial obligation later.  Nevertheless, if you find that you really need a student loan amount that is more than the school has allotted, you have the right to appeal the decision.  This is permitted as long as you do not surpass the maximum amount, as established and maintained by the federal regulations.

If you prefer to get a student’s loans to finance your education, expect that some of the lenders have borrowing limits placed on student loan (for example the federal government places annual and aggregate borrowing restrictions on federal student loans, and the aggregate limit is usually the total amount that every student can borrow in the span of his or her education.)   Knowing this fact, it is necessary to examine and evaluate the terms of every loan you plan to take, for the annual and aggregate loan restrictions.

Do not forget to carefully and honestly evaluate your current financial status, including any financial commitments you have made before entering the school of your own choice.  Understanding that the repayment obligations of every commitment you make is the key.  Over time, you will be responsible for these prior obligations, in addition to any education debt you take on, and your education loans are not given to cover these prior obligations you have.

Finally, consider the realistic determination of your future income by performing a research on the current job market and start salaries in the area you plan to pursue.  You will be paying for your education with your future income, therefore   when choosing a student loan program, be sure to do some investigations on the loans that offer you alternative repayment plans, which can assist you in managing your payments, especially early on in your own career.


Student loans can be a valuable investment, but they are an important obligation that needs to be considered.  In this respect, in order to ensure a successful student loan repayment, you must make sure that you approach borrowing carefully and thoughtfully, not forgetting to be realistic in your budget  and projections.

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