By Ryan Laspina
Senior Specialist, Red Flags and External Reviews at APUS
Financial literacy is important in all aspects of life, but it is especially important when you use financial aid. Making poor financial decisions or listening to poor advice when you attend school can have a detrimental financial impact on you for many years.
Responsible borrowing is the key to put yourself in the best possible financial situation after you finish school. Below are the best practices that responsible FSA users utilize:
- Borrow only the amount that you will need each semester.
Most schools are willing to create a financial award package for you at a higher amount than you actually need. Only accept an award package that reflects exactly how much you need to borrow.
- Use a private loan only if it is an absolute must.
Grants and scholarships are the best option, but most students have to take out FSA loans. If you need more financial help beyond an FSA loan, then explore a private loan. Private loans usually have higher interest rates and are not very flexible when it comes to repayment.
- Read the fine print on your promissory note.
Not every promissory note is the same, so it is important that you understand your contract with the loan servicer. Review the contract thoroughly and be comfortable with all of its language.
- Make your monthly payment on the due date.
Behave responsibly; pay your pre-scheduled loan payments on time.
- Update your loan servicer when your situation changes.
Even for situations as small as a name change, keep in contact with your loan servicer. If you experience financial burdens, reach out to them and see what your options are.
- Do not just click through entrance and exit counseling.
Both types of counseling offer valuable knowledge unique to your financial situation. It may be tedious to go through, but you should carefully read through each section.
There is no secret when it comes to financial literacy, and the above tips are not hard to accomplish. There are many resources out there to aid you in your path to financial literacy. Make sure that you take advantage of them. Your future self will appreciate it!