Federal student loans are an investment in your future. You should not be afraid to take out federal student loans, but you should be smart about it. Federal student loans offer many benefits compared to other options you may consider when paying for college:

• The interest rate on federal student loans is fixed and usually lower than that on private loans—and much lower than that on a credit card!
• You don’t need a credit check or a cosigner to get most federal student loans.
• You don’t have to begin repaying your federal student loans until after you leave college or drop below half-time.
• If you demonstrate financial need, the government pays the interest on some loan types while you are in school and during some periods after school.
• Federal student loans offer flexible repayment plans and options to postpone your loan payments if you’re having trouble making payments.
• If you work in certain jobs, you may be eligible to have a portion of your federal student loans forgiven if you meet certain conditions.

Before you take out a loan, it’s important to understand that a loan is a legal obligation that makes you responsible for repaying the amount you borrow with interest. Even though you don’t have to begin repaying your federal student loans right away, you shouldn’t wait to understand your responsibilities as a borrower.

• Keep track of how much you’re borrowing. Think about how the amount of your loans will affect your future finances, and how much you can afford to repay. Your student loan payments should be only a small percentage of your salary after you graduate, so it’s important not to borrow more than you need for your school-related expenses.
• Research starting salaries in your field. Ask your school for starting salaries of recent graduates in your field of study to get an idea of how much you are likely to earn after you graduate. You can also use the U.S. Department of Labor's Occupational Outlook Handbook or career search tool to research careers and salaries.
• Understand the terms of your loan and keep copies of your loan documents. When you sign your promissory note, you are agreeing to repay the loan according to the terms of the note even if you don’t complete your education, can’t get a job after you complete the program, or you didn’t like the education you received.
• Make payments on time. You are required to make payments on time even if you don’t receive a bill, repayment notice, or a reminder. You must pay the full amount required by your repayment plan, as partial payments do not fulfill your obligation to repay your student loan on time.
• Keep in touch with your loan servicer. Notify your loan servicer when you graduate; withdraw from school; drop below half-time status; transfer to another school; or change your name, address, or Social Security number. You also should contact your servicer if you’re having trouble making your scheduled loan payments. Your servicer has several options available to help you keep your loan in good standing.