Student Loan Primer

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Evaluate repayment plans. Student loans typically offer a handful of alternatives to repay the debt. The traditional way requires a borrower to begin writing checks that cover the loan's principal and interest right after the loan has been made. You can usually capture the lowest interest rates with this option.

Another alternative is simply making interest payments until after graduation. Borrowers who are saddled with the higher rates and fees are those who delay paying anything until they've graduated. The monthly payments will also be higher because the unpaid interest that's been accruing will be dumped back into the loan.

Be realistic. This may sound cruel, but if you aspire to be a social worker or a painter, you probably shouldn't borrow as much as a future dermatologist or investment banker. Here's a handy rule of thumb: Don't borrow more than your anticipated starting salary after you graduate. If you borrow more than twice your starting salary, it's likely you will be in extreme financial difficulty and will struggle to make the monthly payments. Borrowing too much for an education can be even more perilous for students who end up in trade schools.