How to get the cheapest student loan for fall 2024

The cost of higher education has been rising rapidly over the last decade, making it tough for many students to pay out of pocket for the cost of college. So, to help finance their college classes and living expenses, it's becoming more and more common for students to turn to student loans to help finance the costs of their education. But between today's high-rate environment and the growing costs of higher education, that kind of borrowing can be costly.

The good news is, though, that the federal government is actively trying to help cut down on the student loan burden many borrowers face. For example, last week, the White House announced another round of student loan forgiveness totaling $7.7 billion. This round of student loan forgiveness will benefit about 160,500 federal student loan borrowers — and brings the total amount of student loan forgiveness under the Biden administration to $167 billion across about 4.75 million people.

But while this new round of student loan forgiveness offers a reprieve for those who qualify, many other students still face the challenge of financing their educations. In turn, it's crucial for the students who are planning to enroll in the fall 2024 semester to find the most affordable student loan options so they can avoid being burdened with excessive debt after graduation. And, if you're one of them, there are a few strategies you can use to find the cheapest student loan options for the upcoming semester. 

Get a head start on your fall financing. Compare your private student loan options online now.

How to get the cheapest student loan for fall 2024

If your goal is to find the most affordable student loans for the fall 2024 semester, these tips might help:

Exhaust your federal student loan options first 

While private student loans can be a useful tool, federal student loans should be the first choice for borrowers due to the unique benefits and protections these types of loans can offer. For starters, you will typically get offered lower, fixed interest rates on your federal student loans, which can make this type of borrowing the most affordable for higher education purposes. Plus, federal student loans tend to come with flexible repayment plans — and, in certain cases, you could be eligible for options for loan forgiveness or income-driven repayment plans. 

And, these types of loans typically don't have the same types of credit or borrower requirements that come with private student loans, either. You generally apply and potentially qualify by completing the Free Application for Federal Student Aid (FAFSA). The FAFSA can determine your eligibility for federal loans as well as grants and work-study programs, which can significantly reduce the amount you need to borrow.

Find the top private student loan rates you may qualify for here.

Closely compare offers from multiple lenders 

If you need to explore private student loan options, it's essential to do your homework and thoroughly compare interest rates and fees across multiple lenders. After all, interest rates on private student loans can vary widely, and even a small difference can have a substantial impact on the total cost of the loan over its lifetime. 

But your interest rate isn't the only thing that impacts the affordability of your private student loans. There are other factors to weigh, like extra fees or costs. For example, you should be aware of any origination fees or prepayment penalties tied to the private student loans you're comparing, as these can add thousands of dollars to your overall debt.

Consider fixed-rate student loans 

Variable-rate student loans may seem attractive because they typically offer initially lower interest rates, making them appear more affordable upfront. However, these types of loans are subject to market fluctuations and can increase over time depending on the overall rate environment. And that can make it challenging to budget for repayment, as there's always a chance that rates could climb in the future. 

Fixed-rate student loans, on the other hand, provide stability and predictability. This, in turn, allows you to plan your finances more effectively, so while they may not seem like the more affordable option at the start of the loan, fixed-rate student loans are often the cheaper, and more practical, option.

Explore lender benefits and discounts

If you want to get the cheapest private student loans possible this fall, don't discount lender-specific discounts and benefits. Depending on what discounts or perks you qualify for, the benefits your lender offers could help you save significantly on the cost of your private loans. 

For example, some private student loan lenders may offer interest rate reductions for setting up automatic payments or rewards for good academic performance. Others may provide loyalty discounts for existing customers or allow you to release a cosigner after a certain number of on-time payments. These lender-specific perks can help make your student loans more affordable, so be sure to inquire about these perks and factor them into your decision-making process.

Enlist a co-signer 

The cost of your private student loans depends, in large part, on your borrower profile and credit score. The lower your credit score and income, the higher your interest rate tends to be, as lenders will use that information to determine there's elevated risk when lending to you. 

But if you have a creditworthy cosigner, such as a parent or legal guardian, who is willing to co-sign on your private student loans, you may be able to secure a lower interest rate, helping you to save money on interest charges. That's because lenders view co-signed loans as less risky, which can result in more favorable terms and conditions. 

That said, there's risk involved for the co-signer on your loans, as they'll be responsible for paying what you owe if you default. So, it's important to fully understand the responsibilities and potential consequences for both parties before entering into a co-signer agreement.

Borrow only what you need

When you take out student loans, many lenders will offer you more money than what you need for just your tuition and books. And, while it may be tempting to borrow more money than necessary, it's crucial to exercise restraint and only borrow what you truly need for your educational expenses. 

After all, excessive borrowing can lead to an overwhelming debt burden and make repayment more challenging after graduation. It can also make the cost of your student loans more expensive, as you'll have larger payments to contend with, even if you get a low rate on your loans.

The bottom line

Securing affordable student loans for the fall 2024 semester requires diligent research and a comprehensive understanding of the available options. By exhausting federal loan options, comparing interest rates and fees, considering fixed-rate loans, exploring lender benefits and discounts, enlisting a co-signer if possible and borrowing only what you need, you can minimize the financial burden of your education and set yourself up for a more manageable repayment journey after graduation.