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Borrow Wisely

After exploring all your grant and scholarship options, there’s a good chance you’ll still need more money to meet your college expenses. That might mean applying for a student loan. Loans must be repaid, so be smart about how much you borrow and have a plan to pay it back. Use these tips to guide your way.

  • Compare college costs. Before committing to a college, use the Indiana College Costs Estimator to compare your net cost of attending one of Indiana's colleges, after your expected financial aid.
  • Borrow only what you need. Loans must be repaid—even if you don’t finish college, didn’t like the education you received or can’t find a job after you graduate. Never use student loans to pay off other bills or buy things you may want but don’t really need.
  • Borrow federal loans first. Federal loans (Perkins and Stafford Loans for students, PLUS loans for parents) have low fixed interest rates and flexible repayment plans. File a FAFSA at to be considered for federal loans.
  • Make private loans a last resort. Apply for a private loan only if federal loans and other aid you receive are not enough to cover your college costs.
  • Avoid credit cards. Never use a credit card to make a tuition payment unless you can pay off the balance by your next credit card statement.
  • Stay organized. Keep track of all your loans so you know exactly how much you’ve borrowed. Make sure you also keep all your loan documents so you can look up the terms of your loans. Although federal loans have many repayment options, private loans may not be so generous.
  • Research starting salaries in your field. The Bureau of Labor Statistic’s Occupational Outlook Handbook is a great place to start. A general rule of thumb is to never borrow more than what one year’s salary will be when you first start your career.