U.S. Bank understands that it can be difficult deciding how to pay your tuition and other education costs. Here's a crash course to help you understand your loan options.

Lesson 1: Know Your Financial Aid Options
Lesson 2: Borrow What You Can Afford
Lesson 3: Consider the Tax Benefits
Lesson 4: Understand Your Responsibilities

Lesson 1: Know Your Financial Aid Options

To determine your eligibility for grants, scholarships and federal loans, contact your college financial aid office. After making use of these sources you may have unmet education expenses. Private loans are often used to help supplement federal loans when they are not sufficient to cover the full cost of education. To find out how U.S. Bank can help, review our private student loan options.

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Lesson 2: Borrow What You Can Afford

Determine your income - One way to determine the amount of debt you can reasonably handle is to estimate your earnings once you're out of school and in the workplace. Be conservative, since it's difficult to predict the job market and how long it will take to land the job of your dreams. For help determining average earnings for specific careers, consult the U.S. Department of Labor, Bureau of Labor Statistics.

Set a budget - How much you should borrow really depends on how much you will be able to pay when the loan is due. Here's our guideline: your monthly student loan payment should not be more than 8% of your monthly salary. Another reminder: when calculating your income and what you'll have available for bill paying, be sure to factor in other debts (e.g., credit cards) as well as your day-to-day living expenses. To estimate your monthly budget, enter your estimated income and expenses in our monthly budget helper.

Borrow wisely - To help plan how much you can borrow, check out our loan repayment calculator. Note that most student loans allow you 120 months to repay your loan. By changing your total debt amount you can see how your monthly payments will change.

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Lesson 3: Consider the Tax Benefits

Some education expenses may provide the following tax benefits for individuals in certain income brackets.

• Tax deductions for qualified tuition and related expenses (Deduction for Higher Learning) and for federal and private student loans (Student Loan Interest deduction).
  
  
• Tax credits for degree-seeking students in the first two years of a program (Hope Scholarship Credit) or for students who are not in the first two years of a program (Lifetime Learning Credit).

For complete details, contact your tax professional or the Internal Revenue Service.

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Lesson 4: Understand Your Responsibilities

When you take out a student loan, you become legally obligated to repay that loan according to the terms of the agreement. To understand your rights and responsibilities, make sure to read and keep copies of all loan documents. If you fail to pay your loan back, you will be in default. Default will result in your loan being immediately payable in full. It can damage your credit rating, your eligibility for future financial aid, your state and federal income tax refunds could be withheld to pay your loan and could also result in legal action.

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