Taking care of your student loans often feels like a bottomless pit. There’s so much information and so many numbers to absorb that it seems like you can’t keep up; but you can! Here are three great tips to be the ruler of your student loans.
1. 1.) Find Out How You are Able to Spend Your Loan Money
Student loans aren’t just for tuition and room/board; they often cover other costs that add up in college. You’d be surprised to learn that many loans are applicable toward things like transportation, books, and buying/renting a computer. To play it safe, don’t assume that you can spend your loans on these items. Contact someone at your financial aid office and find out what expenses your loans can go toward.
Of course, don’t go crazy with your student loans just because you can. If you know that your books for one semester are going to cost $500 and you think you can pay for them yourself, do it. You’ll be glad you did later on.
1. 2.) Know the Difference Between Subsidized and Unsubsidized Loans
This one is a biggie. Subsidized loans, for starters, are based on financial need. Here’s the best part: As long as you are in school at least half time, no interest will begin to accrue because the government pays it. It saves you a lot of money and ultimately means that you’ll have far less to pay off.
Unsubsidized loans are a different story. Besides not being based on financial need, the interest begins to amount the moment the loan is disbursed. It’s important to know which of your loans are subsidized and unsubsidized because obviously, that’s going to change how much you end up having to pay each month and in total.
1. 3.) Know What Deferment and Forbearance Are
When you’re having a hard time making your monthly payments, you do have options. If you request a deferment or forbearance, your loan company will give you a specified amount of time where you can hold off on making any monthly payments. Handle this with care, though. It’s definitely not a free ride. During this break you’re getting, unless your loan is subsidized, you’re still responsible for all interest accrued.
These are just a few ways that you can maintain control over your student loans. In general, the less you borrow, the better (obviously). If you start to feel overwhelmed by your monthly repayments, remember that you’re not alone. The majority of college graduates are thousands of dollars in debt, and you’re not the only one having a hard time paying them. Also, always strike a balance between what your loan companies tell you and what you find out on your own. Remember: They can help you, but they’re also running a business to make money. You’re spending so much time and cash to get an education—be educated about your loans, too!
Janet Rivas writes for education blogs where you can read more about getting a communications degree.