A Guide to Responsible

Borrowing

Learning about and applying for financial aid need not be a mind-boggling experience. The following tips
will help you make informed, responsible choices about student loans and lenders:

• Wait until you have received the financial aid notification from each college before applying for a student
loan. Evaluate each offer carefully. Explore other sources of aid, such as grants, scholarships, and work-
study programs that do not require repayment.

• Before you borrow, list all possible expenses and determine the total cost of attendance. Be sure to
include college expenses such as transportation, supplies, and entertainment. Estimate the total cost for
all four years of college and develop a plan to finance the cost.

• If it is determined that borrowing is necessary, borrow only what you need. Being eligible to borrow
doesn’t mean you have to take the maximum the lender will allow. Remember, you’re expected to repay
your loans, plus interest. Repaying your loans on time will help you establish a good credit rating—very
important when it’s time to find a job, rent an apartment, or buy a car.

• Most likely this is your first time borrowing money, so be sure to do your homework and be an informed
borrower. Understand the terms and conditions in your promissory note. Signing a promissory note for
a student loan indicates your agreement to repay the loan with all accrued and capitalized interest and
deducted fees.

• While you are in school, it is important to develop a budget and stick with it. This will keep you from
accumulating a large debt and allow you to manage your monthly student loan payments when you have
finished school.

• Choose your lender carefully. Consider things such as repayment plans, interest capitalization, deferment
and forbearance options, customer service, and money-saving benefits.

This tipsheet may contain material related to the Federal Title IV student aid program. While the College Board believes that the information contained
herein is accurate and factual, the tipsheet has not been reviewed or approved by the U.S. Department of Education. © 2007 The College Board. All rights
reserved. College Board and the acorn logo are registered trademarks of the College Board. All other products and services may be trademarks of their
respective owners. Visit the College Board on the Web: www.collegeboard.com. Permission is hereby granted to any nonprofit school to reproduce this
tipsheet for distribution to its students, but not for sale, provided that the copyright notice of the College Board appears on all reproduced materials.