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Research has revealed that student loans account for 54 percent of college tuition aid, making them the largest form of loans given to students. With the increase in student loans, the default rate is on the rise, this could be attributed to the high unemployment rate or other financial factors. Student loans continue to be a drag on many students, with each year there is a marked increase in student borrowers. The rise in student loans along with general college expenses has grown faster than inflation. Why is this? Experts say that more and more students are taking out more and more of a number of student loans, compounding the debt ratio. Taking out new student loans only adds to your debt, plunging you deeper and deeper into financial crisis. It’s simple, the more debt you incur, the deeper the debt spiral.

Student loans will always be with us, unfortunately, borrowing for higher education is the only way most Americans will reach their goal of earning a college degree. Because we know that college loans are not going away, steps should be taken as far in advance as possible to reduce and manage your debt to offset the impact of college loans. Here are some steps you can take to make sure you’re borrowing responsibly.

1. Avoid falling into the loan trap: if possible, avoid borrowing; however, if you’re like most college students, you have no choice but to do so. When it comes time to borrow, don’t be tempted to borrow the full amount available to you personally on the loan, loan, loan, doing so can give you a false sense of financial security. Oftentimes, when you get the maximum amount on a student loan, it’s usually more than you can afford. This often happens when students apply for a need-based loan. These loans are easy to obtain and no repayment is required until after you finish school. If you borrow responsibly early in your student loan process, the final payment period will be manageable.

2. Know exactly how much you need to borrow – know before you go is my motto! When you receive your loan award letter and the maximum amount it lists, because you’ll know in advance exactly how much you need for a given school semester. If you participate in the student work study program or maybe work full time during the summer. The salary earned from your part-time job can be used to pay off some loan money. Also, consider setting aside some of your earnings to pay off the next semester, thus avoiding the need to borrow as much.

3. Only consider student loans with the best terms: Remember, the lower the interest rates, the lower the loan, which means the less you’ll have to pay: Federal Perkins Loans, Stafford Loans: Federal Loan Program (FFELD) and Federal Direct Student Loan Program (FDSLP), Free Application for Federal Student Aid (FAFSA), Federal Parent PLUS Loan Program for Undergraduate Students (PLUS), PLUS Loans for Graduate Students and Professionals (PLUS).

4. Scholarships and Grants: Undergraduate and graduate scholarships are excellent aids to help students pay for their education. Unlike loans, scholarships and fellowships can be considered free money as they do not need to be repaid. Thousands of scholarships and fellowships from thousands of sponsors are awarded each year. Here are some resources to get you started: FastWeb Scholarship Search, College Board Fund Finder, Scholarships.com LLC and Scholarship Search Sites Owned by Education Lenders, Scholarship Central, Award Database, Next Student Scholarship Experts, Broke Scholar, College Data, Wintergreen/Base de Orchard House scholarship data, College NET Mach25, and College View scholarship directory.

5. Military Student Aid is another valuable resource that offers exceptional scholarship opportunities: US Armed Forces Recruitment Programs, Financial Aid for Veterans and Their Dependents, Veterans and FAFSA, HEROES Act of 2003, Military Scholarship Books and Financial aid for veterans. Additional information can be found in the Education section of the Military.com website.

6. Lastly, Private Loans or Alternative Loans: These loans should be your last resort and choose another source if possible. You will find a lot of information when you start your research, the key is not to let it frustrate you and make you give up. Stay focused, persevere, and get through mountains of paperwork in a timely manner. If you wait until the last minute, you may have to put your dreams on hold until next semester, and I’m sure you don’t want that to happen. Make these resources your primary resource for information and you’ll always have up-to-date information at your fingertips: FastWeb Scholarship Search, Local Public Library, and Your Local College Help Desk.

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