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Watching Your Wallet: Preparing for student loans

Watching Your Wallet: Preparing for student loans
Published: Apr. 5, 2022 at 5:00 PM EDT|Updated: Apr. 5, 2022 at 5:55 PM EDT
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LANSING, Mich. (WILX) - As the 2021-22 school year is wraps up, it may be time to fill out online student loan applications for college.

Related: White House to extend student loan pause through August

As a parent, you want to get the big picture on college will cost as soon as possible. Which means logging on the Free Application for Federal Student Aid (FAFSA) website with your child. It’s a must for families who will need help paying for college.

Cherry Dale, a financial coach with the Virginia Credit Union, said just the act of filling it out makes students eligible for grants and scholarships -- as well as federal student loans. She said the website is very helpful and can answer many of your questions.

“You are really going to need your tax documents as a parent,” Dale said. “That’s something that you want to gather before you even start the FAFSA process.”

If you have an option to choose, it’s always smarter to go with federal loans over private student loans. Federal student loans typically have a lower interest rate and more flexible repayment options. Private loans often come with higher rates and require a co-signer, which puts an additional person on the hook.

If you want to help your child pay for college, Dale said you might want to consider a Parent PLUS loan. It requires a credit check, but to be eligible, your child still needs to complete the FAFSA.

More: Watching Your Wallet

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