We don’t have a cute animal to tell you this – but a few minutes of research really makes a difference when it comes to choosing the right student loan.
Half of Alaska Student Loan Borrowers Pay Too Much:
The federal student direct loan should always be students’ first choice. But many students need an additional loan. This is where it gets tricky. In Alaska, more than half of those students don’t make use of state loans that can save them significant amounts.
Based on average rates, and four years in school, students who choose other loans pay approximately:
- $7,000 more for Federal PLUS loans
- $17,500 more for fixed rate private loans
- $8,500 more for risky variable rate private loans
Calculations explained on this pdf: Don't Pay Too Much for Your Student Loan
Risky Variable Rates Dominate:
When students borrow from non-federal lenders, 94% choose variable rates, which can change (and go up significantly) over time. Now consider this: the average private lender variable rate is HIGHER than the average Alaska state FIXED rate! Fixed rates stay the same for the life of the loan.
Alaska Students Have Better Options:
We’ll admit it, we’re a little biased towards Alaska state loans – but that’s because as the state’s higher education agency, our mission is to keep rates as low as possible, and NOT to make a profit. We’re also committed to giving you easy access to the best information to make the right choice for you. See for yourself:
*Interest Rates, not APR – APR calculation not required by federal law
Why Even Bother with Loans?
It is complicated, that’s true – so much so that it can seem tempting to try to avoid student loans altogether! Of course, don’t borrow more than you need to. But when a loan lets you attend full-time and focus on your studies, it pays off. Students who borrow “attempted more courses, earned more credit, and had higher GPAs.” If a student loan means getting that degree and entering the workforce faster, just make sure you do your 15 minutes of research before you chose a loan.
Alaska State loans are available to Alaska residents (for in-state or out-of-state study), and to students attending Alaska institutions. If you’re looking for non-profit loan options for other states, try www.ForYouNotForProfit.org!