As a student loan borrower, there are some things you are expected to know and understand. Here are ten things you should know as a loan borrower.
1. Borrow as little as possible.
Sometimes people forget that they will owe loans back with interest. The less you have borrowed, the less you owe back. Seems common sense, but sometimes people forget how much they borrow, and they get into financial trouble when they graduate. Always use loans as a last resort, and if you don’t absolutely need to borrow loans, then don’t.
2. Have a financial plan while you’re in school.
Don’t wait, start now! It’s a good idea to know how much your schooling will cost. Map out how much gas you’ll use going to school, school activities, etc. Go here for some helpful tools on how to do this.
3. Create and follow a budget.
Don’t wait on this either! This will be critical when you graduate. You will need to pay attention to how you spend your money because you will likely owe back loans. For help with budgets and some helpful tools, go here.
4. Understand your loans.
If you don’t understand what kinds of loans you have, you won’t be able to deal with them very well. You should know what types of loans you have (subsidized or unsubsidized, federal or private) and how your interest works (fixed rate or variable rate).
5. Know your loan servicer.
You should know who is servicing your loan in case you have any issues and need to contact them. The easiest way to find out is to go to the NSLDS website. (You will need your FAFSA PIN to access your information.)
6. Setup an online account with your servicer.
This is a good idea because you will be able to receive messages from your servicer quickly. Also, you will be able to keep your contact information up to date and communicate with them easily.
7. Make payments while in school.
Even if it’s only $5 a month, it will help. You will be keeping your principal/interest lower which will save you money in the future. If you skip one coffee a month or five song downloads a month, that can add up over the length of a program.
8. Understand there are other repayment plans.
If you are having trouble making payments on your loans, look into maybe switching to a different repayment plan. Servicers won’t suggest you try a different one; you will have to ask. You may qualify for a different plan that fits your situation better. Don’t be afraid to ask.
9. Repayment is easier when your overall debt is lower.
Try to avoid credit cards and large items that require installment payments. This is helpful for when you go into repayment because then you have less to worry about paying back. It’s better to just worry about rent/utilities and your student loan payment, rather than rent/utilities, car payment, the big screen TV, credit card debt, vacation, and student loan payment.
10. Keep in touch.
Don’t be a stranger when you have issues! Call someone and ask questions. Your best option is to call the servicer directly. If you don’t have their number, the NSLDS website will provide a contact number to call. Nobody can help if they you don’t ask for help.
Another friendly post from your friends at Metro Business College!