Students and parents looking to fill the gaps between financial aid awards and the costs of college often apply for loans with the same level of zeal that they put into admissions applications in the first place. In that driving desire to finance higher education, borrowers are at risk of making costly mistakes. Here are the top five mistakes people make when applying for student loans — and tips on how to avoid them.

1. Fearing the loan

Despite the increasing costs, a college education is still statistically a smart financial move. According to a 2017 report by the U.S. Bureau of Labor Statistics, college graduates ages 25 and over had median weekly earnings of $1,286, when compared to $713 for high school graduates, and $563 for workers without a high school diploma. A 2014 study by Pew Research Center found that college graduates age 25 to 32 who are employed full time earn approximately $17,500 more per year than their peers who didn’t graduate from college. In addition, their overall job satisfaction is higher and their unemployment rate is much lower.

“Borrowing some reasonable amount to help finance your college education is overall a good thing,” explains Jonathan Burdick, dean of admissions and financial aid at the University of Rochester in New York. “It’s a smart investment because you’re increasing your long-term earning power.”

“Wise borrowing at a reasonable level in order to attend the college where you feel most likely to succeed is better than avoiding all risk,” Burdick adds.

2. Borrowing too much

Key to making sure that college pays off is keeping debt at a manageable level. Patricia Christel, formerly with Sallie Mae, says that keeping debt manageable also means thinking about life after college.

“As they make borrowing choices, families should consider the total amount they will need to pay back and how much the student can estimate to make in their chosen career path,” she explains.

Estimating a post-college salary can be tricky, especially if undergrads haven’t chosen their major yet. Before taking out a loan, there are a few ways families can get a clearer idea of their child’s future earning potential. Consider potential majors, research the job market for those majors, and contact the school’s alumni office to find out where grads in that major wind up working.

Families can also compare schools using the U.S. Department of Education’s College Scorecard. Aspiring students can compare schools by average annual costs, graduation rates, and salaries after graduation.

3. Missing out on government deals

“The biggest mistake I see is when students do not fully take advantage of the federal Direct student loans,” says Kevin Michaelsen, director of financial assistance at Meredith College in Raleigh, North Carolina. “Instead, they secure a higher-interest alternative student loan with limited terms from a private lender.”

Federal Stafford loans don’t require a credit check to qualify and are packed with incentives for students including low fixed interest rates of 4.66 percent for undergrads and 6.21 percent for graduate students and those seeking professional degrees. Federal loans also come with borrower protections including a six-month grace period after graduation and the ability to extend the life of the loan or defer payments.

In fact, under the right conditions, the government will actually forgive your federal student loans entirely. Borrowers who opt for the federal income-based repayment plan will have their loan payments capped according to their income — lowest-income borrowers won’t have to pay at all — and after 25 years of consecutive payments, the government will dismiss the remaining portion of the bill. Borrowers who go into a public service profession will have their federal debt dismissed after 10 years.

4. Skipping the details

Federal loans come with fixed interest rates and are fairly cut-and-dried when it comes to the details such as loan fees and borrower protections. Private student loans can be all over the chart.

“Students have a habit of not reading the fine print on their loan, then learning after the fact that there is not a deferment provision that they expected or there’s an origination fee that they were not aware of,” says Jane Dessoye, former Executive Director of Enrollment Management at Misericordia University in Dallas, Pennsylvania.

In addition to reading up on fees and repayment terms, students should also investigate whether their loan comes with a fixed or variable interest rate, whether there’s a grace period before repayment begins and what happens if they can’t make their monthly payments.

If you’re currently struggling to make monthly payments on a private student loan, contact your lender. You may be able to refinance your student loan for more favorable terms.

One way or another, always check your credit score before taking out a loan. You can check your credit score for free at myBankrate.

5. Staying hands-off

According to Melanie Weaver, director of financial aid for Ohio Northern University in Ada, Ohio, the biggest mistake families make is letting parents handle the loan process.

“Students come into our office their senior year confused and not really sure how much they owe or what loans they have,” Weaver says. “I believe that when they get involved and understand what they are borrowing, it has an impact on their academics because they have established a relationship of what each class is costing.”

Understanding their debt can also help students plan their college tenure and avoid adding courses that can tack an extra semester or year onto their academic plan.

It’s wise to begin making payments early, and throw some extra at your debt whenever possible. If you wait until payments are due and pay only the minimum, you may needlessly extend the life of your loan.

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