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How to Afford and Evaluate Student Loans


Make sure you choose a loan that best meets your needs, but keep in mind that the cheapest loan is not always your best option. Because loans must be repaid, you should plan your debt financing carefully:

  • Ask for information about interest rates and fees, repayment terms and options, and other obligations.
  • Review loan terminology to understand banking terms.
  • Consider your future income and don't borrow more than you can afford to pay back.

How Big a Loan Can I Afford?

It's important you only borrow what you can afford to pay back. If your student loans equal more than eight percent of your overall income before taxes, you may begin to have difficulty paying other bills, qualifying for additional loans or saving money.

Debt-to-income calculators can help determine how large an income you would need to repay your loan:

Learn More.

Loan Features

Each loan has its own characteristics and features. These features must be carefully compared to decide which loan is best for you. Compare your options side-by-side and include:

  • the total cost to repay the loan (including the fees, principal and interest)
  • how long it takes to repay the loan
  • the amount of the monthly payments
  • the penalty you'd pay if you were late on a payment or default
  • the impact that the loan would have on your total financial package (how it would affect your grant, scholarship, and work study awards)
  • whether it can be consolidated with other loans at the time of repayment

For more information on the loans available to you: