Steps to Take Before You Borrow

Determine if a Private Student Loan is right for you.

Pursuing higher education is an important and exciting milestone but figuring out how to pay for it responsibly can feel overwhelming. The Finance Authority of Maine (FAME) is here to help. We believe that with the right information, tools and support – families can make informed choices about how to plan and pay for higher education.

Families typically pay for college using many resources – income, savings, financial aid, and tax breaks. Many families also borrow to pay for higher education. Since federal student loans have many benefits, including flexible repayment options, they typically should be considered before private student loans. Some families also choose to borrow against the equity in their home or to take out private education loans.

The Loan for ME is designed to help you:

  • Determineif a private student loan is right for you and if so, how much you can afford.
  • Prepareinformation to find the right loan option for you and documents you may need to apply.
  • Applyincluding local Maine lender comparisons.

Other FAME-administered education loan and grant programs may be the right fit for you, including some with a loan-forgiveness feature. Learn more at our Additional Resources page.

Steps to Take Before You Borrow

Watch this video to help determine if borrowing is right for you. This video covers steps 1-6 to take before you borrow:

The simple fact is that many people, even after receiving their financial aid, will have a gap and require some form of additional borrowing to cover the costs of higher education.  However, there are important steps you can take today to lower the amount, or even eliminate the need to borrow, see interactive infographic “Steps to Take Before You Borrow.”

It is important that you fully understand the differences between federal and private student loans, including who is responsible for repayment. For example: if you borrow a private student loan, but require a co-signer, both you and your co-signer (if you fail to make payments) are responsible for repayment of the loan. Alternately, if a parent borrows a Federal Direct PLUS loan, the parent is responsible for repayment, not the student. Be sure to “know before you owe,” a strategy that will help ensure a successful financial future!