Attending school comes with great financial responsibility. It is important to understand all the ins and outs of being a student loan borrower. When used properly financial aid can be your means to an education and the potential for better career prospects. Making smart financial choices will be very beneficial and reduces the possibility of accruing debt in the future. Here are a few tips on how to be a responsible student loan borrower:
Borrow only what you need– Use all grants and scholarships before borrowing money that has to be repaid. Consider a tuition payment plan that allows you to make payments over time, and work with your financial aid advisor to borrow as little as possible.
Have a plan – Create a spending strategy and stick to it. Plan the entire cost of your education and how you will pay for it. The plan should take into account when you will receive money through financial aid and other sources, and it should include necessary expenses plotted out through the course of your projected academic years.
Create and follow a budget– Plan for your expenses by developing a budget and live within your means based on your monthly income. Make adjustments to remain within your budget and do not use a credit card to cover a shortfall or unnecessary purchases.
Understand your loans – There are several different loan types. They include federal and private loans, which can be subsidized or unsubsidized. It is important to know and understand the terms and conditions of your loans as some loans have fixed or variable interest rates.
Know your servicer – A servicer is a company your lender may use to help administer and manage your loan(s). A servicer may assist with the disbursement of funds, collection of payments, and account maintenance. Servicers will send you important loan info, collect your payments, and answer your questions. To find out who the loan servicers are for your federal loans, visit nslds.ed.gov.
Make payments while in school – Making small payments while in school can reduce your principal and/or interest balance. Paying interest while in school will also keep you aware of what you are borrowing.
Know your repayment options – When repaying your student loan consider which repayment plan could best meet your needs. Choosing the right one for your situation is important to keep your finances in order. Contact the loan servicer for your student loans to find the best option for you.
Stay in touch – It is important to stay in touch with all those who are involved with your student loan. This includes staying connected with your school’s financial aid office and your loan servicer to make sure your contact information is up to date. This allows them to have contact with you to provide you with information. You can also stay in contact and ask any questions or concerns you may have.
Making healthy financial and student loan choices in the beginning will prove to be very beneficial in the end. By contacting the financial aid office at your school, they can provide you with information regarding your financial aid eligibility and the amount needed to attend. This will give you more insight on borrowing what you will “need” for your education. You may contact the Financial Aid Department at American Public University by calling 1-877- 468-6268 x3630 or email firstname.lastname@example.org. Here is some additional information from Nelnet.com on how to manage student loans, Live Life Fit Guide.
By Shalena Gonzales
Financial Aid Specialist, American Public University