Metro Credit Union

For many students, college is the first big step toward independence—and for families, it’s often the first time navigating the world of student loans. While the process may seem complex at first, with a little planning and the right questions, borrowing for college can be manageable and even empowering.

Here’s a guide to help students and families approach the lending process with clarity and confidence.

Step 1: Understand What You Actually Need

• Start by reviewing your financial aid award letter.
  • Take a close look at your total cost of attendance.
  • There are direct costs and indirect costs, like tuition, housing, books, transportation, and personal expenses.
• Subtract all financial aid you have been awarded by the college.
  • Awards typically include federal grants, federal loans, merit and need-based institutional scholarships, outside scholarships, college work study programs and state aid.  
• The remaining amount is what you’ll need to cover—through savings, work, family support, or private loans.

It’s important to borrow only what you need. Borrowing thoughtfully helps you stay on track financially and avoid unnecessary debt.

Step 2: Learn the Basics of Student Loans

There are two main types of student loans: federal and private.

Federal loans are offered by the government and typically come with fixed interest rates and flexible repayment options. They’re a good starting point for most students.

Private loans, on the other hand, are offered by banks, credit unions, and other lenders. These can help fill the gap when federal aid isn’t enough. Terms vary widely, so it’s important to compare interest rates, repayment options, and borrower protections. Unlike Federal loans, private loans do not typically have origination fees.

Many credit unions, like Metro Credit Union¹, offer private student lending with student-friendly features—such as deferred payments while in school, competitive interest rates, and even a line of credit that can be used across multiple academic years. These options can make borrowing more predictable and less stressful.

Step 3: Talk Openly as a Family

Student loans often involve the whole family. Whether a parent is co-signing or helping with repayment, it’s helpful to have honest conversations early on.

Discuss:

• Who will be responsible for the loan?
• What’s the plan for repayment after graduation?
• How will this loan fit into your family’s financial goals?

These conversations can help set expectations and build a shared understanding.

Step 4: Ask the Right Questions

When comparing lenders, don’t hesitate to ask questions. A good lender will be transparent and helpful. Here are a few things to ask:

• What is the interest rate, and is it fixed or variable?
• Are there any fees (origination, late payment, etc.)?
• Can you defer payments while you’re in school?
• Are there any discounts for automatic payments?
• Do you offer a co-borrower release option?
• What happens if you need to pause payments after graduation?

Some lenders, like Metro, offer an interest rate reduction for setting up automatic payments and provide clear, upfront information about repayment options. These small details can make a big difference over time.

Step 5: Stay Organized

Once you’ve chosen a loan, keep all your documents in one place—digitally or physically. Track how much you’ve borrowed each year and revisit your repayment plan regularly. Tools like loan calculators can help you estimate monthly payments and total interest over time.

If you’re borrowing from a lender like Metro, you may also have access to online dashboards or customer support that can help you stay on top of your loan throughout college and beyond.

Step 6: Think Ahead to Repayment

It might feel early to think about repayment before you’ve even started classes, but it’s a smart move. Understanding how much you’ll owe—and when—can help you make informed decisions about your major, job prospects, and lifestyle after graduation.

Some lenders offer refinancing options after graduation, which can help lower your interest rate or monthly payment. Metro, for example, offers refinancing with a potential cash bonus, which can be a helpful tool for graduates looking to simplify or reduce their debt.

Borrow with Confidence

Student loans are a powerful tool for investing in your future. By approaching the process thoughtfully—asking questions, comparing options, and planning—you can borrow with confidence.

And while there are many lenders out there, don’t overlook local options. Local financial institutions like Metro Credit Union² often provide personalized service, competitive rates, and a community-focused approach that can make a real difference—especially when you’re just starting out.

¹All loans subject to approval.

²Membership eligibility applies.