BATON ROUGE, La. (WAFB) - Trying to find the money to send your teenager to college can be a challenge. And while student loans are an option, this is a topic many families want to know more about, especially when money is tight and there is uncertainty about the next school year.
The Federal Student Aid (FSA) office offers some tools and information to help you get a better understanding of student loan investments right now.
One of the biggest questions families run into this time of year is should you take out student loans or not?
Fixed federal student loan rates are at an all-time low right now. Direct loans handed out on or after July 1, 2020, and before July 1, 2021, have a 2.75% interest rate for undergraduates compared to last year’s 4.53%.
This means you could save hundreds or thousands of dollars in the amount you’ll have to pay back over time if your student takes out a loan for the 2020-2021 school year.
Understanding how loans work is another challenge for an incoming college student.
The FSA office released a new online tool to help you and your kid get a better idea of how this money works. The loan simulator tool offers three services to get you on the right track to repayment.
One interactive element coming soon is the I Want to Simulate Borrowing More Money feature. This will show you how the choice of school and time play a factor in how much money you will need to borrow and payback after graduation.
The other two features help you find the best loan repayment strategies based on your goals and some things to consider if you ever struggle with payments in the future.
When you click on one of these features, it will take you through a series of questions to match your situation with the right plan for your family.
These tools are helpful for current student loan payers, too. Use your FSA login in information to better examine your federal student loan situation.
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