Smart Borrowing

Get the Facts Before You Borrow

Student loans are a great way to help cover the costs of school; however, private student loans should really be your last option for financing. Before you borrow a private student loan, learn about and take advantage of the many grant and scholarship options that are available to you.


Most grants are a form of student aid that you do not have to repay as long as you meet all of the eligibility requirements. Be sure to review all grant eligibility requirements carefully as some grants can convert to loans.

Grants are available through the federal government, your state government, and your school. The two most common federal grants are the Pell Grant and the Federal Supplemental Educational Opportunity Grant (FSEOG).



A scholarship is a form of student aid that you do not have to repay as long as you meet all of the obligations. It's easy to think of a scholarship as a coupon that you can apply to your tuition, lowering your education costs.

Because you do not need to pay them back, always apply for as many scholarships as possible before you consider using loans to pay for your college education.


Be a SMART Borrower is a FREE interactive tool where you can create up to 4 different scenarios to see how your career and college choices may affect how much you pay for college and if you are at risk for overborrowing.

5 Tips for SMART Borrowing

  1. Research your expected salary in your future career, find an affordable school, and borrow realistically.
  2. Research job availability in your chosen field, before selecting your major.
  3. Consider all types of financial aid carefully.
  4. Educate yourself on the many loan options available before borrowing.
  5. Inconsistent or untimely loan repayment could affect your future.

The Basics of Loans

Understanding the ins and outs of student loans can be confusing; but, it doesn't have to be. Educate yourself on some important points to ensure you start out on the right path.

Borrow only what you need.

Remember, you MUST pay back your student loans. So borrow only what you need to cover your costs, not what you are eligible to receive.

Exhaust other types of aid before using private loans.

If you need additional funds after obtaining financial aid through grants, scholarships, and federal loan programs, consider private loans as a last resort.

Read your promissory note (know what you agreed to).

Before you receive your student loan, you must sign a promissory note. The promissory note is a "promise to pay" contract between you and the lender that is providing your loan money. This legally binding document specifies your responsibilities for paying back the loan.

If you withdraw from school, you still have to pay back your loan.

If you withdraw before completing your degree, you must still pay back your loan. A portion of your loan may be able to be returned depending on the amount of time you spent at the school. Review your school's refund policy to determine if any of the funds can be returned.

If you can't find a job, you are still responsible for paying back your loan.

Regardless if you can't find a job, you are still responsible for making payments on your student loan. Fortunately, there are options that may be available to you to postpone payments under certain circumstances.