Father Knows Best

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Father Knows Best

Ever since I was a teenager my father, Stephen E. Bonvie, spoke these eloquent words, “The power of disciple the rewards of time. ”He spoke these words in context of saving money. Of course I was caught in the age old conundrum of having the knowledge and game plan at age 15, but not having the means by which to execute these words. As you get older you tend to possess the income, but have already let valuable years pass you by. It’s a tough paradox.

Honestly, most of us struggle just to keep our heads above water, and loans serve as the perfect bridge to get what we want. We are a buy now pay later society. We want everything immediately and most of us are just not prepared to wait. If the neighbors next door have one, we want one as well. We take out loans for everything these days. We take out loans for automobiles, homes, computers, and education; just to name a few. The key is to take out loans on assets you forecast will appreciate over time – like education.

When you make the decision to go to school you are making an investment in yourself and your future. You yourself become an appreciating asset. Knowledge after all is power and school is certainly a wise investment. Not only go to school but you also need to apply yourself while going to school. Getting great marks, participating in clubs and support organizations and returning to the community also builds character and you learn from others as well.

Of course you still need to make the right decision when it comes to taking out loans for school (assuming you don’t have the means by which to pay for tuition up front). It is critical that you make intelligent decisions before you enroll in school or you will be looking at a mountain of debt that would make Mt. Everest look like a leisurely Saturday afternoon climb with the kids. Most people graduate with some kind of school loan debt and that is ok, all we are saying is that if you can minimize it, then you will be further ahead over the long term.

The first thing you should do is complete your Free Application for Federal Student Aid (FAFSA). Once completed you will be sent an awards letter from your school outlining which federal loans and grants you qualify for. It’s usually best to take out federal loans over private as they provide a more generous fixed interest rate and have better borrower benefits. Anytime you can reduce the amount of interest you pay, puts more money in your pocket. If you pay less for interest, you will have more money to spend on other things especially when cash is short.

It’s also important to note that Federal loans, such as the Stafford loan, do have yearly and aggregate maximum allotments. In the event you have met your maximum federal allotments and still need additional funds for school I would then recommend private loans. Treat private loans the same way and pay attention to the interest rate you agree to. Keep it as low as possible and also pay attention to the repayment terms. When do you need to begin repayment? What are the requirements for repayment should you decide to leave school for any reason? You might find that the loan becomes fully payable on the date you leave school or within a few months of departure. Apply these same questions to Federal Student Loans as well. If you are properly informed you will make better decisions.

If you are not in a situation where you can rely on your parents for help with student loans or helping you out with money, then you should use this site and the internet in general to help figure out the best course of action. If your parents are not well informed about money, then turn to someone who is able to help you. Be careful at the same time. Anyone who is lending money will give you suggestions, but remember they are in the business of lending money and they may push you in one direction, while someone who is interested in saving money will always give you a different perspective.

In the early days of our marriage, I drove my wife crazy, because I would always ask the same question to at least three different people to see what different answer I would get. Often I would receive three slightly different answers from these three different people. None of them would be wrong, they just had a different perspective on things and this was reflected in the answers. When I took these answers and melded them together, I often arrive at a really good solution to whatever problem I was trying to solve. The same applies to student loans, whether they are Federal Student Loans or private loans. Check around for private loans look for loans with the best terms and conditions before you sign on the dotted line.

I hope these student loan tips will help guide you in the right direction. You can apply some of these suggestions to everyday life as well. They have really helped me in my life and saved me a great deal of money from time to time. I think we all need a little direction in this fast pace world from time to time. I have been fortunate to have my Dad guide and teach me many of lives lessons; lessons I will be passing on to my son Barrett, and lessons I will be passing on to you the reader in the coming months. We issue posts about all kinds of subjects related to student loans and loans in general with the objective of passing on our view of how to deal with borrowing money for various things that we feel we need in our lives. Just think of me as your student loan father. I will not steer you wrong. After all, father knows best.