I’ve recently become really passionate about money issues; mainly because it’s recently become very apparent to me as a college graduate that I don’t have a lot of money and that I’m ridiculously in debt…but I digress. Borrowing money for college can be completely necessary in many circumstances, but there is a right and wrong way to do it. In the next couple weeks I’m going to beat this issue to death almost as much as I did with the caucuses. My main goal is not to scare people out of borrowing money, but rather that other students don’t make the same mistakes I did.

I get it, your parents aren’t paying for your schooling like the spoiled kid across the hall from you, it sucks, but more than likely you’re going to have to borrow some money. The problem is that college students have so many options in front of them, but they don’t always know what the right ones are. When I first looked into student loans and financial aid, all I saw were numbers; and not just of money I owed, but also of money I could get…money I could get very easily.

The problem is that I didn’t know what I was getting into; I made my first mistake by not educating myself. There are so many different loan options out there, and the best thing you can do before borrowing is know what the differences are. Your first and often best options are federal loans; they come with low interest rates that are often fixed and don’t accumulate interest while you’re in school. Sometimes students can get by with these alone, but often times they aren’t enough. For instance, when you do your FAFSA, your ability to get money from the government is contingent on your parents’ earnings. If they’re in a higher income bracket, you’re not going to get as much, so unless you’re the kid I spoke of earlier (can you tell I’m bitter), you have to look at other options. This brings up private loans.

My biggest advice when looking at private loans (besides being sure you actually need them) is to LOOK AT ALL YOUR OPTIONS. For years Iowa students have rarely looked further than Iowa Student Loan for their private loan options. When I borrowed I didn’t realized I had other options; it was put right in front of my face as a suggestion from the school, and I didn’t think twice. As far as I was concerned, Iowa Student Loan wasn’t much different than what federal loans were, except on a state level. Little did I know, Iowa Student Loan is just a name, and the only reason they were put in my face was because they had contracts with the school at the time.

Before I go any further, I encourage you to read a few articles on this issue that have already looked into the issue far more than I have:

Buried in Debt

College Loans by States Face Fresh Scrutiny

E-mails detail student loan firm's drive for profits

After reading these articles I was pretty fired up; it angered me to find out that when I entered college I wasn’t given all the information I should have had. As much as I believe it’s a student’s responsibility to educate themselves, I also think it’s the school’s responsibility to educate the students and offer them the best options possible; and most of all, I think it should be a lender’s moral obligation to have a student’s best interest in mind.

In recent years, however, these issues have gotten much more attention, and changes have been made. Iowa State University, for instance, no longer offers Iowa Student Loan in their financial aid packages, and as far as I know, no longer accept money from the corporation as part of “partnership loans.”

I’ve talked to the director of financial aid at Iowa State University, and I truly believe that they have student’s best interest in mind. I also made my best effort to get in touch with representatives of Iowa Student Loan, but nobody seemed to want to talk to me. I know their marketing strategies are still being questioned, so it would be my hopes that before I do next week’s story somebody with them would talk to me. I don’t want to necessarily deter you from borrowing from Iowa Student Loan because in some cases they could be your best private loan option, but you should realize that there are numerous other lenders no different from Iowa Student Loan that may have a better loan option for you.

I’m not far past being a student myself and I am dealing now with the mistakes I made when I was. It’s so easy to be ignorant when it comes to borrowing money because it’s something that you can act on now and “worry about later.” That fact is, though, that ‘later’ is going to come sooner than you realize. Next week I will have even more advice on this topic from the people who know it best. My main goal is for students to realize the options that they have and to make the most educated decisions they can when it comes to borrowing.