The Potential for Fraud and Long-Term Financial Stress from Student Loans – SWARK Today

LITTLE ROCK – Arkansas college students are in the early stages of preparing for the August school year and some are applying for student loans. It is important to always read the fine print and beware of scammers trying to take advantage of unsuspecting victims. There are a few key points that every student should know before agreeing to a loan that often takes decades to repay.

“A student loan should be a short-term commitment to give students a chance to be successful,” said Attorney General Leslie Rutledge. “Unfortunately, too often these loans are carried over for decades, preventing our best and brightest from investing or taking risks as entrepreneurs.”

Attorney General Rutledge provided the following tips to students considering taking out a student loan:

Make sure you understand your loan. Before taking out a loan, find out about the repayment terms and other obligations of the loan, the interest rates and how they apply to the loan, and where to find your balance and payment schedule after you close. For federal loans, visit the National Student Loan Data System (

Use the grace period. There is often a grace period after you graduate or stop attending college or university. It is important to know how long the grace period is and whether interest will be charged during the grace period. Grace periods allow you to get your “feet on the ground” while you create a loan repayment plan.

Know your repayment options. Every loan is different and some have the ability to change payment options based on your income rather than a set monthly amount. In some cases, there is an option to temporarily defer payments if you find yourself in financial distress.

Be wary of credit consolidation and refinancing offers. Many companies offer loan refinancing options, but may not provide the promised benefit or services that consumers can access for free. Consumers should learn all the details about any loan refinancing offer before signing up for one.
Check your credit report to see all of your educational debt, including government and private student loans.
Consider part-time work, a dual study program, and any scholarship available to keep student debt as low as possible.