You aren’t doomed.
Will Varner / BuzzFeed
Or, you can at least try. "Interest rates can range from 2.25% all the way to close to 11%," Diana Draper, director of financial aid at Fairfield University, told BuzzFeed. "Federal loan interest rates are dictated by Congress, based on banking standards, but you might have some room for negotiation with private lenders." She recommends looking for rates that are close to prime rate (currently, around 3.25%), finding out if the bank tacks on additional points or interest charges, and making sure you know if that rate is fixed or variable. In order to get the best possible rate, you might have to find a co-signer (usually a parent) with more established credit.
Most students focus on the interest rates they're being offered — an important factor, certainly — but Draper urged students to keep repayment terms in mind, especially when signing with a private lender. "This is especially significant if you're going into a career, like teaching, that does require additional schooling but doesn't promise the high salary like, say, medicine or law," she said. "Not all private loans allow you to defer payment, or offer income-based options like federal loans do, and some require repayment in a specific number of years."
If you're dealing with federal loans, there are allowances for people who meet certain specifications: most commonly, full-time teachers in low-income schools, and those who work in public service jobs. If eligible, and if payments are made on time, loans may be forgiven after 10 years. (For teachers, you may have as much as $17,500 forgiven.) There are other, less common instances in which certain loans might be canceled or discharged — disability, bankruptcy, school closure, for example — but a full list of qualifications is available here. Steer clear of any private debt settlement firms that promise debt forgiveness — especially if they charge a fee.
