Summer is your rightfully deserved time off, but imagine how much less stressed you will be during the final weeks of the season if you do a little preparation earlier in the summer. A good place to start is your student loans. Finding funding for college can be a long and taxing process, so it is in your best interest to start applying for these loans as soon as you can. Doing a little homework on this subject is important because you don't want to make a mistake and be in over your head. Here are a few tips to help you navigate the world of student loans:
Take the exact amount you need
Federal loans can be some of the most painless loans to apply for and come with flexible repayment options. These options also provide you with lower interest rates than standard private loans, so keep that in consideration. But when you are filling out the Free Application for Federal Student Aid, think about how much you actually need to take out. Receiving more than you need can make repayment difficult when that time comes. If you're going to a school that is smaller and less expensive than some of the larger ones, you probably don't need to take out the full amount you are offered.
Leaving some aid on the table can make repayments easier, and you won't have to stress about dealing with higher debt.
Calculate average monthly college expenses
Figuring out how much you will be paying in school fees each month can help you determine the amount of loans you need. This can include tuition, room and board, textbooks and extra department fees for your major. Once you have calculated your monthly school expense budget, you can figure out your loan amount.
Check out your non-loan options
You may think student loans are your only avenue for financing, but there are plenty of other funding options for college. These are a few common alternatives to applying for loans:
- Hold off on college for a year and save.
- Investigate scholarships and work-study programs.
- Enroll part-time in college.
- Go to a less expensive school.
While these options may not help you entirely pay for school, they can help ease the stress of taking out large loans.
Keep track of your debt
Taking out a minimal amount of loans can make your repayment easier, but if you do not monitor this debt and instead toss away the notices you get from the lenders, you could be hurting yourself once repayment comes around. Losing track of the state of your loans could result in you forgetting when repayment begins, and it can hurt your finances, as late payments will show up on your credit report.
Most lenders have all your information available online, but it wouldn't hurt to make a spreadsheet with the list of your loans, the total amount you borrowed, repayment start dates and the average monthly payments.
Choose a repayment plan for your post-college life
After you have completed college, you get a few months of relaxation before you have to start repaying your loans. This is the perfect time to start saving money and research repayment plans. Each lender offers different repayment options, so find one that works best for your post-college financial situation. You can look into consolidating all your loans into one payment or you can see if there are any income-based options. Don't forget to consider your income, type of loans you have and interest rates when looking at plans.