Goals page education photo: Paying for education.

Student Loan Alternative Options

Getting a degree can be a great way to jump start your career. Whether you’re looking to advance in your current job or learn something new, going to college can help open up countless new opportunities--if you can pay for it.

College is a valuable experience, but it can also be an expensive one. Even after cutting costs , you’ll still likely owe hundreds or thousands of dollars for every semester you’re at school. Unless you have money saved, chances are you’ll have to borrow the money from somewhere.

Before you consider taking out a personal loan or checking the limit on your credit cards, make sure you research what other funding options you have available to you. Thanks to government programs designed to make college more affordable, many financial institutions offer loans designed exclusively for students.

Student loans offer several attractive advantages over other lending options, including:

  • Easier To Get Approved: Thanks to federal guidelines, it is easier to get approved for a student loan than most other financial options.
  • Lower Interest Rate: In many cases, student loans have a lower interest rate than comparable traditional private loans.

Depending on your financial situation, you may have the option to borrow for college through a federally-discounted program, or through a traditional lender who offers student loans.

Federal Loans

After making the decision to continue your education, one of the first steps you should take is to fill out your Federal Application For Student Aid (FAFSA). Colleges use FAFSA to help them decide what aid to offer students, including scholarships and grants. The federal government uses the results of your FAFSA application to determine how much you can borrow in federal student loans.

The federal student loan program is designed to make education more affordable for low and mid-income families. Designed for people with less-than-perfect credit, student loans are easier to apply for and offer far lower interest rates than most private loans. In many cases, they are one of the cheapest ways to borrow money to pay for school.

Subsidized Vs Unsubsidized Federal Loans

With federal loans, you don’t have to make payments if you take the appropriate number of classes each semester at a qualified school. This delay is known as loan deferment. Even during deferment, the loan will continue generating interest that is then added to the balance when you graduate. Depending on your FAFSA results, however, you may qualify for a subsidized loan.

  • Subsidized Loan: The federal government pays interest on your loan while you’re in school. Your balance will not grow.
  • Unsubsidized Loan: The federal government does not make interest payments. When you graduate, the loan company adds the interest charges you built up during school.

Private Student Loans

If you still have school bills to pay after taking out federal loans, or if you do not qualify for them, many financial institutions offer private loans for students. Although interest rates are typically higher than federal student loans, they’re still generally cheaper than most other private options.

Each lender can offer slightly different loan options, so it’s a good idea to research your options before deciding what loan to apply for. Some payment options include:

  • Deferment: Some private lenders allow you to defer making payments on your loans before you graduate.
  • Interest-Only Payments: As long as you take a minimum number of credits, you’re only required to make payments on the interest of your loan, lowering your monthly costs while in school.
  • Full Repayment: You make regular payments while you’re in school, increasing your monthly costs, but allowing you to start paying down your debt immediately.

You Could Stay Debt Free With A Lump Sum

If you’re receiving payments from a structured settlement or annuity, however, contact Peachtree Financial to learn about options for paying for college without going into debt. You can sell all or just a portion of your future payments for a lump sum of cash to help you cover the cost of getting a degree.

Peachtree Financial does not provide legal, tax or financial advice. Please contact independent professionals for those services.


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