One of the myriad of consequences for families affected by the economic downturn in the last few years is the lack of money to help pay for college. As a result, many incoming college freshmen turn to student loans to help cover the cost of tuition, boarding, and other expenses.

For the majority of these borrowers, paying for their education will be their first major purchase, and their first major exposure to the lending and payback process. The average student who utilizes student loans will borrow an average of over $20,000 to pay for their educational expenses, according to a recent report by The Project on Student Debt. While taking out student loans is a necessity for many students, how educated are these young people about the responsibility they are taking on? For example, how many students know the APR rate for the loans they apply for, or take the time to calculate what their payment amounts will be when they graduate and enter the repayment period? Read the rest of this entry »

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