December 21, 2018 By Jodi Okun
How to Make Smart Student Loan Decisions
Another year has flown by so quickly it seems we hardly have time to get our bearings. I hope you all enjoy your upcoming holidays with family and friends. Tucked in with all the celebrating, though, you should try to take an opportunity to seriously think about your financial responsibilities as they pertain to paying for college.
As a student you might not realize just how much impact the money decisions you make now will have on the rest of your life. Learn how to handle money wisely now as you make choices about paying for college, and you will gain valuable knowledge that can help you take better control of your financial situation as you move on to paying for a car, home, and other financial goals in life.
One thing we all need to learn to manage effectively is credit. Used wisely, credit can help us find the funding to help achieve our dreams while spreading payments out over a longer period of time. Good examples of this are using credit to take out a mortgage or an auto loan. If we make poor decisions about credit, though, we can find ourselves getting deeper into debt.
At this point in life your best opportunity to learn about the wise use of credit is by making good decisions about how you use student loans, both federal and private, to help finance your college education. After you graduate, you will need to figure out how to incorporate those monthly payments into your new life situation.
With 2019 around the corner, let’s take a look at the ways students can start the year with smarter student loan knowledge:
High School Juniors
You might think it is too early to start thinking about paying for college, but in reality you should already be well into your college planning process. As early as September or October you will be filling out admissions forms and completing financial aid applications. There is a lot to accomplish by then, and one big piece of the puzzle is sitting down with your parents and having an open discussion about money. Find out if or how much they plan on contributing to your college education, so you will know how much of the responsibility will fall on you. If you will be taking on a larger chunk of the financial costs, you’ll need to think carefully about how much you can afford to spend and how much you want to borrow in student loans to pay for college.
High School Seniors
You should have a pretty good handle on what college you will attend and how much financial aid you will receive. If there is still an amount outstanding, or if you haven’t calculated all your living expenses yet, you may need to apply for more scholarships or borrow money through federal student loans or private student loans like those offered by College Ave. Learn about the differences in these loan types now so you will have the necessary financial resources available when the tuition bills start arriving for your freshman year.
It might seem like graduation is down the road, but it is really important to begin making some financial choices now. Get your details together about how much student loan debt you have, and start making projections about how much money you will be earning so you can compare that against how much you will be paying. If the figures don’t work out, you’ll have to learn about student loan repayment options very quickly.
College grads who have just begun repaying student loans might be realizing that it involves more than they expected. Face the situation head on, get a grip on how much you owe, find out what your repayment options are, and look into consolidating or refinancing your student loan debt if needed. Don’t get behind the ball by ignoring your payments because interest charges and late fees will only add more costs. If you’re having trouble making payments, contact your student loan servicer to explore your options.
A New Year should always start on a bright note – you can make yours better by getting the information you need to make smarter student loan decisions.
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