Video: Responsible Borrowing
Learn how to be an informed and responsible borrower.
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0:00 College or career school is an important step in achieving your future goals,
0:05 and there are many financial aid options to consider.
0:08 Did you know that a federal student loan can be a great way to help pay for school?
0:13 After all, a grant, work-study job, or a scholarship
0:17 can be a huge help, but these forms of aid may not cover
0:20 the full cost of attending school.
0:23 So if you decide to take out a federal student loan,
0:25 it’s important to understand what you are getting and be a responsible borrower.
0:30 Getting a loan is a big decision. You might be paying your loans back
0:34 for 10 years or more, so take your time to decide.
0:37 And remember to accept only the loans that you need,
0:41 because you’ll have to repay them once you’re out of school.
0:43 Here are a few things to keep in mind when deciding how much to borrow.
0:47 Do some research: Make sure that your school is the right fit for you
0:52 both educationally and financially.
0:55 Location, location, location:
0:57 The amount of money you need to borrow can depend a lot
1:00 on where your school is located.
1:02 In-state schools and community colleges
1:04 may cost less than out-of-state schools.
1:07 And finally, getting an idea of your future income
1:10 is also important when deciding how much to borrow.
1:13 Starting salaries vary greatly depending on your career path,
1:17 so it’s worth thinking about how the amount of your loan will affect your future finances.
1:21 After all, your student loan payments should be only a small percentage
1:25 of your salary after you graduate.
1:27 Once you’ve decided on your school and figured out how much money you should borrow,
1:31 you’ll need to sign a promissory note, which is an agreement to repay your loan.
1:35 Make sure you keep a copy for your records.
1:38 If you do take out loans, you’ll need to keep in touch
1:41 with your loan servicer when repayment begins.
1:44 Your loan servicer will make this easy for you
1:47 you by offering web, email, and phone contact options.
1:50 If you make this investment in your future,
1:52 being an informed, responsible borrower can pay off in a big way.
1:56 If you have questions or need more information,
1:59 please visit StudentAid.gov.
