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The easiest student loan mistake you can avoid is to go through a private lender. If you fill out a Federal Application for Free Student Aid (FAFSA) and get a student loan through the Federal Government's Direct Loan program, you can get no strings financing for most, if not all, of your college education.

With a Direct Loan, you avoid many student loan pitfalls unique to the private lenders.

- Instead of sifting through multiple offers and having to sort out the good offers from the bad, you get a straightforward, no strings attached offer from the Federal Government based on your financial need.

- There's no need to worry about the pitfalls of dealing with multiple lenders, because when you get a Direct Loan you only need to deal with one lender: The Federal Government.

- There's no need to discuss the pitfalls of an adjustable rate student loan, since the Direct Loan program locks in your interest rate for every disbursement of financial aid they give you during your education. And the rate is typically reasonable.

- There's no need to worry about getting shafted with a short grace period, since a Direct Loan always comes with a standard six month grace period, usually more than enough time to land a lucrative job that enables you to begin repayment once the grace period expires.

- Many lenders may not account for your income in setting your repayment plan. The Direct Loan program gives you multiple repayment options, including a plan that factors in your current income and bases the size of your monthly payment on your income.

Clearly, the Direct Loan program is borrower focused, with various parameters in place to protect the borrower and enable reasonable repayment and forbearance terms.

With Federal Student Loans, the only pitfall you need to concern yourself with is to avoid borrowing too much or too little. Borrow too much, and you will owe bigger payments while getting charged more interest in the interim. Borrow too little, and you won't have enough money to meet your needs during the next year.

Borrowing too little is easy to avoid: The Government will make you a static offer, usually way more than you need for tuition, books and board. If you wanted to take less, you would need to contact them directly and let them know, but if you want the full amount you can simply sign the promissory note and await disbursement.

To avoid taking on too much debt, the easy approach is to figure out your budget for the coming school year, take the full amount and just pay back the remainder once all expenses are paid and funds are booked for the coming year's expenses. You can hold onto the money for the full year at the expense of extra interest charges on the unsubsidized portion of the loans, but this approach would ensure that you have all the money you need for the year's expenses.

Most student loan mistakes come about while borrowing from a private lender. Make sure to borrow from the Federal Government's Direct Loan program, and you will avoid the possibility of making these mistakes. When you do, though, you still want to be sure not to borrow too much to pay back, or too little to pay your expenses.

Learn more about this author, Steven Gomez.
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