For those that don’t pay attention, a student loan can get out of hand quickly for new students. In 2014, the amount of debt that recent students graduated with was almost $29,000, a figure that was up to 100% on the rate of inflation compared to ten years before. With student loans increasing, there are several tips and strategies that can be used to help deal with the loan both before and after college.
The first thing to do when planning on how you’re going to manage, or even take out a student loan, is to use the student loan calculator. This will give you a good estimate of how much you’ll need to borrow, and how much you’ll be expected to repay each month. Look at different repayment terms, and see how it changes the monthly payments to make sure that the amounts are realistic based on how much you should be earning out of college. Take into account that you may not be earning what you expect straight away, so anything you can do to reduce your monthly payments in the beginning will be useful.
Start saving now
Once you have a clear idea of how much you’ll be borrowing and how much you need to pay back each month, it’s useful to start saving as early as possible. If you can get and maintain a part-time job through summer or on the evening and weekends, you’ll be able to start saving and rely on your own income rather than relying on more loans. The key is to try to be responsible and save the money you’re earning. It isn’t as fun, but if you can save enough to live through college and reduce your overall borrowings, it will be worth it in the long term.
Look at scholarship options
Many schools give out scholarships for either high grades or other out of school achievements such as a sport. But then, there are more options to look into as well, such as organization bodies within the industry you’re looking to study in, or with your parent’s employers, for example. Make sure to research into this as much as possible as it could give you a significantly easier time when you get out of school.
Think about which college you prefer
You may have an outstanding college in mind, but make sure to see if the financial debt associated with the college is going to be worth it. If you end up graduating with a huge loan, think of how much your school of choice is actually going to impact your ability to get a job. It may be more effective to pick a local college where you can live with your family, for example, which will greatly reduce your costs of living as well as your tuition fees.
Make a budget
When you’re at college, one of the best things you can do to reduce your loans is to make a budget and stick to it. By avoiding spending all of your money on fancy meals and nights out, you’ll be giving yourself more freedom in the future as you won’t be repaying all those expenses with additional interest ten years from now.