PHOENIX — "I'm just paying them as I can," explains Arizona State University student and U.S. Marine Cody Magee.
Magee has something in common with nearly 900,000 other Arizonans – he has student loans.
"I started paying them back while I was in the military and when I came back here, I used the G.I. Bill and was able to finish out my education."
After enlisting in the military, Magee became eligible for other assistance programs, but not everyone has that option.
So we decided to reach out to lending expert Kate Wood at NerdWallet to get her expert advice on the dos and don'ts of taking out student loans.
Wood says step one is always to fill out the FAFSA to see what kind of aid you may qualify for.
After that, Wood says to look toward federal loans.
"Your private loans will kind of be your last resort and something you'd not use as a primary source of funding, but as a way of filling the other gaps in your funding," Wood said.
Wood explains that federal loans tend to have lower interest rates and allow borrowers more flexibility when it comes to repayment time.
If you do need private loans, Wood says make sure you shop around.
"There are definitely things you can compare between different lenders. Looking at the interest rate is definitely going to be the primary consideration for people because that's something that's right up front and you can look at it and say who is going to give me the best rate? Also, a lot of these student loan lenders will be able to give you a rate quote without doing a hard credit check. They'll do a soft pull which means it doesn't ding your credit score or anything like that. But you still get an idea of how you'd pay with that."
Wood also said there are some questions you need to ask yourself before taking out loans.
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First, what kind of repayment options will you have? If you lose your job, could you defer the loans? And if you go back to school, would you be able to make interest-only payments?
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