The Michigan Department of Treasury’s MI Student Aid Team wants families to be alert and informed when considering taking out student loans.
“Michigan students and families cover a considerable amount of their higher education costs,” State Treasurer Rachael Eubanks said. “When student borrowers become their own financial advocate, they can better understand how to manage and leverage the financial aid they receive. Please carefully consider only accepting those loans that are needed. The choices made by students today will have outcomes later in life.”
Related: Coverage on student loan forgiveness
The team offered up seven best practices to consider when taking out loans:
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Complete the Free Application for Federal Student Aid (FAFSA). Colleges use information from the FAFSA to determine their financial aid awards. By completing and submitting the FAFSA, students maximize all their financial aid options.
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Understand loans must be repaid. Not all financial aid included in a financial aid award letter is free money. Many financial aid awards will include federal student loans. Unlike grants and scholarships, loans must be repaid with interest.
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Check the amount of interest being offered on a loan before accepting it. Federal student loans, Parent Loan for Undergraduate Students (PLUS) loans, and private loans have varying interest rates and repayment terms. Before taking out loans, students should identify and compare each loan’s interest rate and then accept the…
