Things you should know about student loans

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1. The co-signer can harm your loan
Most of the private lenders require a co-signer before they can give any money to a 18 years old.This co-signer is usually a relative or even one of your parents but also it can be anyone who wants to help you.The problem here is that you’ll depend on your co-signer credit score and also the interest rate depends on that.

2. You can get low interests if your college is expensive
At this moment the cheapest loan that you can get is a government-sponsored subsidized Stafford loan which rate is around 3.4% for an academic year.For this loan the government covers the payments for the entire time when the student is in college and also for more six months after he graduates.
If a student wants to get such a loan then he needs to show some financial need based on the college choosen.If their college is expensive then they’ll get lower fees than if the college is lower-cost.
Also it depends on your family financial power because for example one from four students choosing to go to a college which costs $40.000/year are getting this type of loan but just one from fourteen students which are going to colleges with taxes between 10 and $20.000 are approved.

3. You need to pay...forever
You should know that students loans will never be discharged in a bankruptcy and this is a huge mistake that most of the students but also their parents or their co-signers do because they think in time they can manage to pay almost any amount but the situation it is very different.
If youcan’t pay it back then the federal government can garnish even 15 percent of the co-signer wages until they manage to pay off the debt.

4. Co-signers exiting their contracts
Now all of you know that a co-signer can exit a contract if they manage to pay on time their first 12 to 48 months while the graduate has a very good credit score.
If you are a parent and you are involved in more than one private loan then your chance to exit the loan is if the borrower consolidate with a huge risk for the loan to get more expensive if the student credit score is lower than his parents credit score is.

5. Cover student expenses
Private but also federal loans cover not only the tuition but also the cost for attendance. The cost of attendance refers to the transportation from and to the student hometown, health care expenses, computers and other things.