After you’ve added up the amount you’ll get from scholarships, grants and your own money, you may still need to borrow money from the federal government, banks and other sources. A student loan is borrowed money that must be repaid with interest. When you take out a student loan, you are making a legal obligation to repay the loan, so carefully consider the amount you borrow.1 Be a responsible borrower and only borrow what you need.
After you’ve added up the amount you’ll get from scholarships, grants and your own money, you may still need to borrow money from the federal government, banks and other sources.
Borrowed money and interest
Remember, when you borrow money, you will have to pay it back with interest. Interest can be considered as the cost of borrowing money. If you want to borrow money, you will be charged an interest rate, which is the percentage over and above the original loan.2 The higher the interest rate, the more you will owe over and above the loan amount.
To better understand interest and how it can impact how much you will owe in finance charges over and above your loan amount, please access the Department of Education’s loan calculator.
Types of borrowed money available
- Federal loans – always explore federal loans first for the lowest interest rates
- Private loans – offered by banks, credit unions and other lending sources
- APEX Institutional Financing – only available when all other federal and private loan options have been exhausted
What is a co-borrower?
For many loans you will need a co-borrower. A co-borrower (sometimes referred to as a co-signer) is a person other than you who signs the promissory note (promise to pay back) as support for repayment on the loan. A co-borrower might be a parent, a grandparent or a friend - someone with good credit who will sign with you for the loan; someone who sees how committed you are to attend college.
Many students need a co-borrower, especially if under the age of 24. A co-borrower with a good credit score can help secure a loan with the best possible interest rate.
Be a responsible borrower
- Borrow only what you need to attend school
- If you don’t understand something, call your lender or visit with a Westwood student finance specialist
- Make regular, scheduled payments
- If you are having a problem making a payment, talk to your lender or Westwood student finance specialist right away
- Open all you r mail and read everything pertaining to your student loans
- Keep all your loan documents in a file
- Make a budget and stick to it. Your education will be worth a few sacrifices along the way
Your rights as a borrower
- Before you begin repayment, your loan holder is required to give you a repayment schedule and detailed information about interest rates, fees, the balance you owe and available repayment options
- You have the right to defer repayment for certain defined periods, if you qualify
- You have the right to request forbearance
- You may prepay your loans in whole or in part at any time without penalty
Your responsibilities as a borrower
- Your primary responsibility is to repay your loans according to the terms •and conditions of your loan agreement
- You must attend entrance counseling before receiving loan funds and exit counseling before leaving school
- You must make payments on time, or make other arrangements with your •lender or loan holder
- You must notify your lender if you change your name, address, phone number, or enrollment status
- You must notify your lender if you’re unable to make payments
- You must maintain satisfactory academic progress as defined by the college catalog
1Financial aid is available to those who qualify
2Rates subject to change at any time