7 Secrets You Need to Know About College Student Loans

1. Financial aid officers at all the major schools are wined and dined by the big student loan companies. These financial aid offices have set-up a "loan process" with a specific lender. In many cases, this is the federal government, but many colleges are now going with private corporations. The paperwork hassle in dealing with a bureaucracy has become too much for these financial aid officers. In some cases, the financial officer is really a "stand-in" rep. for a student loan company. However, what they are selling or advocating may not be the best deal.

2. Under the Clinton administration the federal government got involved in the student loan process in a big way. Now the private companies are getting the business back. If you are going to a private college you may not be eligible for federal loans.

3. Always consider your options and talk to a financial aid counselor. If you are applying for graduate school, be aware of the fact that there are few scholarships for graduate school relative to undergraduate programs. You may be able to find a scholarship, but in most cases it will not cover the real costs of graduate school.  A graduate student loan may be your only option.

4. It is recommended that you go with a loan company that offers all of the following types of loan services:

5. Whenever possible lock in a student loan rate. Some loans are based off the Treasury bill. In these cases, the loan rate fluctuates. This can either be really good or bad. When interest rates go up, you may want to restructure the loan.

6. Pick a fixed student loan rate and start date to do a side by side comparison. Make sure that you are comparing apples to apples when student loan shopping and checkout numerous student loan companies before making a decision.

7. Never borrow more than you absolutely need. Compound interest can make a small student loan turn into a huge amount. Don't take out extra money and play the stock market or try to get rich quick. This scenario almost never works out for college students. Moreover, in most cases it is a violation of the student loan agreement.