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| CWR College Funding BrainTrust |
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Credit Doesn't Have to be a Four-Letter Word!
By John Crowley
Senior Director, Strategic Partnerships
The National Society of Collegiate Scholars
 The fall semester is about to begin, and you've gotten your financial aid in order, right? What, you still haven't completed your loan application? Why not? Oh, you want to avoid going into debt. That's ok...I understand and appreciate that thought, but did you know that student loans can actually help you in more ways than just paying for school? Let me explain.
There are 2 types of financial aid that you may receive from your school. The first type is known as "gift aid," and it is made up of grants and scholarships. These are funds that you don't have to pay back when you leave school. The second type of financial aid is known as "self-help." Work-study jobs and loans fall into this category. Most financial aid packages from colleges and universities will include a combination of gift aid and self-help components.
Some federal student loans (i.e., Stafford, Perkins,) are different from other forms of credit because you're borrowing on your signature. No credit check is performed for these loans, and as long as you haven't defaulted on a previous federal loan, you'll be fine. Some private student loans do require a credit check, and some may require you to apply with a credit worthy cosigner (parent or other relative). In either case though, as soon as you apply for a loan (federal or private), it will show up on your credit report, and it will help you build a positive credit score. You should request a copy of your credit report each year (everyone is entitled to one free copy every year), and you will see your student loans there.
You're absolutely right that you want to avoid debt as much as possible. Believe me, there are many other purchases you will make in the future that will require your need to borrow money. But your student loans can help you earn a more favorable interest rate on those future purchases! This is the best time in your life to build your credit rating, but I want to be clear that your future is in your hands. How you choose to manage your student loans will impact your abilities (both positive and negative) to buy a car or house. Some employers even perform credit checks for candidates before they make a final hiring decision. Just stay on top of your situation and you'll be fine. Future creditors and employers will look favorably on you if your student loans are in great shape.
About The Author: John has over 18 years of experience in the enrollment management process, working for both public and private corporations, and a large state university. He has worked with colleges and universities to help them take advantage of technical and financial products and services to meet their goals. He has led a nationwide Community College Initiative that sought to educate students and administrators about financing options that can make a community college education more affordable. He began his career working in the Admissions and Financial Aid Offices for a large state university.
About The National Society of Collegiate Scholars: The National Society of Collegiate Scholars (NSCS) is an honor society inviting high-achieving freshmen and sophomores. Members must have a GPA of 3.4 or above and rank in the top 20 percent of their class. NSCS is proud to offer more money for undergraduate scholarships than any other honor society nationwide. But more than that, NSCS is a growth opportunity, leadership training ground, and resource. (Source: NSCS website)
Contact Information:
The National Society of Collegiate Scholars
11 DuPont Circle, NW
Suite 650
Washington, DC 20036
800-989-6727
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