Signed to Student Loans

By Destinee Whittington, Mayor Marian Barry Summer Youth Employment Program 

Many young adults pursuing higher education do not have the luxury of a college savings fund or a full ride scholarship. If you’re among the many people who will need to take out a student loan for your education, here are the answers to your questions. 

What are student loans?

A student loan is money that you borrow to pay for school if you do not have the funds available to you. Since it’s a loan, it will accrue interest over time. There are federal loans and private loans. Federal loans often have lower interest rates than private loans. Here’s a breakdown of the different types of federal student loans:

  • Direct subsidized: This loan is available to undergraduate students with financial need.
  • Direct unsubsidized: This loan is available to undergraduate and graduate students, and there is no requirement to demonstrate financial need.
  • Direct PLUS: This is a loan that graduate or professional students and parents of dependent undergraduate students can use to help pay for college or career school.
  • Federal Perkins: This is a low-interest loan for undergraduate and graduate students with exceptional financial need. 
  • Direct Consolidation: This a Direct Consolidation loan allows you to consolidate multiple federal education loans into one loan. The result is a single monthly payment instead of multiple payments.

Do I need to take out a student loan?

Loans should only be used if necessary, so it’s best to seek a student loan only if it’s your last resort. The loan will accumulate interest over time so in the end you’ll owe more than you borrowed.  It’s not a good idea to take out loans just to get a refund check from your university because you’ll have to pay it back later.

I’ve already received a student loan, now what?

If you already have student loans, here are a few options. The first thing you should do is log into your account at StudentAid.Ed.Gov using your FAFSA, Free Application for Federal Student Aid, information. When you create an account, you’ll be able to see how much money you’ve borrowed and the amount of interest accumulated on each loan.

If you’re still in school, the second thing you should do is make a budget for the academic year.  Keep in mind questions such as: What kind of grants and scholarships do I have already? How can I lower my education costs? The answer is simple. You can start by choosing an affordable meal plan or living in cheaper housing.

One of the most important things you should do is learn about any scholarships available to you. You might be surprised at how many scholarships you qualify for based on your financial need or grade point average. There are hundreds of organizations ready to give money to fund your higher education. Try taking some time out of your day to create a list of potential scholarships and grants that you qualify for and be sure to make note of the application deadlines.

Education is supposed to be an investment, not a lifelong burden. >> Learn about student loan repayment.

How can I find the right scholarships and grants?

Although looking for scholarships may seem time consuming, those scholarships will be very helpful! Try using key words that correlate to your major, ethnicity, religion, or gender to find scholarships that you could earn. You can also sign up for scholarship websites or check out your state’s government website to see what type of aid they provide for their residents.

How can I keep my list of potential scholarships organized?

As a young person myself, I decided to make a list of scholarships and grants. I labeled them by name, award amount, contact information, and deadline. This allows me to keep track of my potential scholarships.

If you find it necessary to take out student loans, make sure to properly manage your interest and loan amounts to avoid any surprises upon graduation. Do your best to limit how much you borrow by looking for plenty of scholarships, fellowships, and grants so you can limit how much you borrow. >> Learn more about financial responsibility.


Let America Saves help you save money. It all starts when you make a commitment to yourself to save. Take the first step today and take the America Saves pledge to save money, reduce debt, and build wealth over time. And it doesn't stop there. America Saves will keep you motivated with information, advice, tips, and reminders to help you reach your goal. Think of us as your own personal support system.

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