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College & Career Training in Alaska

There’s no doubt that higher education or training pays off. In study after study it is estimated that a person with a bachelor’s degree will make more than 1 million dollars, in lifetime earnings, over a person without one. To get a college degree or training, however, takes money. Not every person will have the money to be able to authorize a debit purchase for costs of college or training. And, unfortunately, not every student will be eligible for grants and scholarships to help pay the bill. For those reasons, there are student education loans. At some point you or someone you know may need to take out a student loan. It’s wise to know before hand how to choose wisely because they are not all the same.   

There are basically three sources that offer student loans. They include the federal government, state higher education agencies, and private lenders (most often banks or credit unions.)

Something to keep in mind, is that federal and state governments usually offer student loans as a service to their residents. They are not offering student loans for profit and in most cases the interest rate is set to cover the cost of the loan programs. Most of these government agencies are classified as “not-for-profit” (not to be confused with a non-profit 501 c3) agencies. This means these not-for-profit agencies might make money, but because it is not their intent, the money made often goes into a general fund that lawmakers decide what to do with. 

On the other hand, banks and private lenders are in the business to make money and there is nothing wrong with that. They are doing their job. In some cases, banks and private lenders may be able to offer the borrower a better deal. However, the burden to find that information, is put on the student. Students should do their research on interest rates and borrower benefits to make sure they understand the terms of the loan they wish to take.

Some tips to keep in mind when doing your research.

  • Shop around. Know the type of interest rate (fixed, variable, or credit based) and the pros and cons of each.
  • Know the before and after borrower benefits (origination fees, forbearance/deferment, income-based repayment, discounts for autopay and etc.)
  • Know the terms of the loan and never borrow more than what you need.

Education loans can be a good investment for your future, but remember they are money that needs to be paid back.

For more tips on student loans visit: https://acpe.alaska.gov/PLANNING/Money-marts/The-Right-Amount-to-Borrow

About the Author

Christina Campbell

Christina Campbell

ACPE: College & Career Specialist

Christina Campbell is a College & Career Specialist with the Alaska Commission on Postsecondary Education. She has a BS in Journalism and Communications from Eastern New Mexico University, and a Broadcast Meteorology Certification in Geosciences from Mississippi State University. Christina was on the original implementation team that brought College Goal Sunday to Alaska in 2005. 

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