For many college students the decision to take on student loans is the first major financial decision they鈥檝e been required to make. Prior to accepting student loans, it鈥檚 important to understand the benefits and the consequences of assuming student loan debt, as well as, understand your responsibilities as the borrower.
On principle, student loans are fairly straightforward: you borrow money (loans) that you use to pay for tuition and living expenses and then you repay those loans after completing your program and beginning your career.
While simple enough in principle, many students struggle to understand the impact that repaying student loans will have on their financial future. This leads to students borrowing more than they need and more than they can afford to pay back.
To avoid student loan repayment regrets, try the following tips BEFORE you borrow:
One mistake students make is assuming that the cost of college only includes tuition-they fail to account for the cost of books, housing, transportation, and lost wages while they take classes. These other expenses can lead to high interest credit card debt in addition to student loans. That is a recipe for financial disaster. Visit this Cost of Attendance page for a better idea of the total cost of college.
Before even considering taking out loans for college, review your personal budget with this and trim out unnecessary spending. Even a few dollars extra that can go to paying for college up-front decreases the amount you will have to pay back later.
It鈥檚 easy to think of the future as a place where you will 鈥済et a job鈥 and 鈥渕ake money鈥 but putting some specific (realistic) figures to those phrases will better prepare you to make decisions about student loans. Student loan payments can make up a large percentage of your take-home pay, but if you have an idea of what that take-home pay, and your total , will be then you will know how large of a student loan payment you can handle. Use this to figure out what your future payment will be with different amounts of student loan debt.
Many students think of college as 鈥渢heir job鈥 and choose not to work while taking classes. But, even a small part-time job can contribute to paying for college upfront and reduce the amount needed to be made up by student loans.
Many students think that if they can鈥檛 pay for ALL of their college tuition at the beginning of the semester, they HAVE to take out loans. That鈥檚 not true. Talk to the Cashier鈥檚 Office before taking out any loans and learn about payment plans that stretch the cost of college out over the length of your stay. This might be all you need to be able to pay for college out of pocket and not have to take out any loans.
If you have tried all of these tips, and exhausted all other forms of financial aid (including scholarships and grants) and still need a loan see the Direct Lending/Loans information here.
After you complete your program or stop attending, your federal student loans will enter deferment (a period in which you do not have to make payments towards your student loan balance) for six months. After that six month period ends, you will enter into loan repayment. Although you may select or be assigned a repayment plan when you first begin repaying your student loan, you can change repayment plans at any time鈥攆or free.
You can get information about all of the federal student loans you have received and find the loan servicer for your loans by logging in to .
See the for more information.
If you can鈥檛 keep up with your payments, you might qualify for deferment or forbearance. These options allow you to pause payments on your loan without penalty, if you qualify. The two are very similar, with the main difference being eligibility and the length of time involved, (deferment can run up to three years, while a forbearance is usually for a year or less).
Visit
黑料福利网 Community College has partnered with Student Connections to help you understand your loan repayment options and address any issues that you may encounter. Visit or talk to a borrower advocate at (866) 311-9450.
