Remember, it pays to shop around and get the best possible terms on your loans. Make sure you’re clear on these points with your lender and your school before signing off on your aid package:

For Lenders:

What is the lowest and highest interest that you offer?
This one is for private loans only, since federal student loans have fixed rates. Since lenders determine your interest rate based on your credit score, there is no way to know what you rate will be without applying. But, if you know your credit score and the range of rates that a lender offers, you can assume that if their best rate is 8% and you have a stellar score, that your rate will be close to 8%.

Are there origination or guarantee fees?
You want to get the full list of fees that a lender will charge you upon taking out the loan. Some lenders waive these fees, but in turn make their rates a tad higher to make up the money. Go here for a full list of student loan fees that different lenders charge.

Is the interest on the loan fixed or variable?
Again, this does not apply to federal student loans. Most private loans have variable interest rates. As of today, MEFA (Massachusetts Education Financing Authority), a non-profit, is the only lender offering a fixed rate private student loan. Hopefully if lenders see a demand for this type of thing, more of them might introduce it, but it is your job to complain for not offering it.

How long is the repayment term on the loan?
Most often you will be able to set this yourself. We suggest you try to make this as short as possible—ten years if you can handle it. This will make your monthly payments higher, but you will pay off the loan sooner and get charged less interest over the life of the loan. Plus, you can always negotiate with the lender to extend the term later if you need to.

Am I required or allowed to have a cosigner?
You want to see if the lender cares about lending to someone with a short and possibly not so pristine credit history. And if they will let you take on a cosigner since this can often improve your rate. Depending on your credit and whether or not you have a willing cosigner, choose the lender that best suits your situation.

If I choose to consolidate after I graduate, are there fees attached?
It’s good to know up front, if you choose to consolidate later to extend your term or lower your rate, what kinds of fees the process will involve. For more on consolidation, see our guide.

Can I extend my repayment term if I want to later on?
If the lender charges consolidation fees, but the only reason you wanted to consolidate was to extend your term, see if they’ll let you do that without consolidating. If they want your business, the lender should be flexible enough to let you shorten or extend your repayment period based on your post-college situation.

Will I be eligible for a deferment or forbearance if I am unable to make the payments?
You want to know how the lender will treat you if you graduate and don’t yet have income to pay off the loans. See if they would be willing to grant you a deferment or forbearance for a certain period of time if you are in trouble. This is typically easy to do with federal loans, but not always with private loans, which will still charge you interest in the event of forbearance.

What borrower benefits and discounts are available to me?
See what kinds of discounts the lender has to offer. Sometimes these will be pretty shabby like a rate reduction after 48 on-time payments. But, other times you might get a reduction just for directly depositing the money from your bank account each month.

For Financial Aid officers:

What forms do I need to fill out to apply for financial aid (FAFSA, Profile, other forms)?
Sometimes, different schools use different forms to determine your financial aid. Best to ask upfront before you’ve missed a deadline.

Do you have need-based or merit-based scholarships and grants?
You want the most help you can get and you want to know if your school has some additional funds to help you cover tuition. Depending on whether you’re an ace student or come from a low-income household, decide which school will help you the most.

Does your school have any special financial aid practices where you match grants or offer grants instead of loans?
Again, a few schools have introduced such programs. If they haven’t, best to remind them about what schools like MIT and Emory offer.

My financial aid package is not enough for me to be able to afford your school. Is there anything you can do?
Often, financial aid officers are given the authority by federal aid programs to make adjustment to your package. If you feel they’ve overlooked something be sure to explain the situation and have paperwork ready to back it up.

Do you have special discounts with the lenders on your preferred lender list?
As we’ve said before, you don’t have to use a lender from a school’s preferred lender list. But sometimes the school has established discounts with a lender that are only available to its students—good to know as you’re shopping around.

Want to Know More?

• What are Student Loans?
• Do You Need Student Loans?
• Advice for Getting the Best Deal on Student Loans