Paying for college can be a stressful process and the choices you make today can impact you and your family while in school and beyond graduation.

Maybe it is your first time around or you have already gone through the student loan process once or twice. Regardless, you should consider these helpful lending tips brought to you by First United Bank & Trust Student Loan Specialist, Laura Helmich:

Review your financing as a family. Carve out time to sit down as a family to review your college bill and how you plan on paying for it all.  If there are scholarships, grants, work-study or federal loans in play, you will see this deducted on the bill but there may be a remaining balance.You may also have other college-related expenses such as travel/commuting, lab fees, books, laptop or study abroad program that you may want to include in the total cost of your education. Add it all up to get the best idea of how much your financing needs will be. Ask yourself if there are costs that you may be able to cover, without financing?

Explore financing options. There is no rule that requires you to pay out of pocket, but the cost of a college education comes with a hefty price tag these days, so why not try to acquire less debt. Families can cover the total cost in 2 primary ways, exploring federal options first:

  • Federal Parent PLUS Loans – loan program offered through the Federal Government for parents of dependent students.
  • Private student loans – loans offered by banks, credit unions or other finance companies for students and parents. Private loans are offered through banks, credit unions or other finance companies. These loans have several repayment options as well and are entirely credit-based (must be 18 years or older to apply), often requiring a co-signer which is a great first step to establishing credit history.

Know that loan type, repayment option, rate matter. When choosing a loan type (federal or private), carefully consider the repayment options and rates. There are 3 repayment choices: immediate repayment, Interest-only, and full deferment of payment. While you cannot change these options once you establish a loan, you can make different choices year over year and eventually consider a consolidation option once you have been in repayment for several years.

A great way to save over time is to find a great low rate and pay on the interest that is accruing while you are in school. The interest only repayment option can do that, avoiding capitalization of unpaid interest. Since, student loans typically do not have pre-payment penalties, you can make payments anytime that will be applied toward unpaid interest and principle (once outstanding interest has been satisfied). If you pair this with a low rate, then you may feel that you achieved more than a degree by graduation!

There are alternative lending options to student financing, should you have established credit or perhaps own a home. Parents often explore products like home equity loans or low rate credit cards. Whatever loan option(s) you choose, be sure to keep good records and know that there is help.

First United Bank & Trust is committed to supporting students and their families throughout the college experience and the milestones that follow. Visit our website today at MyBank.com/students.

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