How to Keep Debt Low
Five top tips for lowering your college loans.
College financial aid can be confusing, especially when it comes to school loans and how you’re going to repay the money for college. While it can be tempting to accept the first loans you find just to be sure you can pay for college, you could end up with a whole lot more debt that way.
Since you’ll be paying back your college loan for about 10 years after graduation, you’ll want to make wise choices now about which loans you accept and how much you borrow.
By making the most of your own money for college, you've put yourself in the best position for paying back your tuition.
In addition to reading the fine print on each loan you’re considering, here are five additional tips to help you get college money without leaving yourself with a financial mess after you graduate.
- Keep looking for scholarships and grants after you start your college education. There’s a lot of college money out there in the form of free grants and scholarships, and the more you’re able to get as gift aid, the less you’ll have to take out in college loans.
- In addition to school scholarships and grants, getting a job off-campus or a Federal Work-Study Program on-campus while you’re pursuing your college degree is another good way to keep loans down and help you pay them back more quickly.
- Start your bachelors degree at a community college for the first two years before transferring to a 4-year college or university. This will save you a great deal in tuition costs as well as other school-related expenses. Just be sure any college financial aid you receive will transfer to your new school. Talk to the financial aid offices at both schools to find out what their policies are.
- Don’t accept every loan in your financial aid offer letter. Only accept the loan amount you actually need, and only those loans that have terms you’re sure you can pay back. A quick way to evaluate the loans you’re offered is to look at the interest rate, which will give you a good idea of how much money you’ll be required to pay back. Generally, federal loans have better rates than private loans. And of the federal loans, choose subsidized loans over unsubsidized loans. If you need to take out private loans, make sure you compare student loans to get the lowest interest rates and repayment terms.
- As hard as it sounds, there are simple ways to cut your daily expenses, which will allow you to rely less heavily on college loans and keep college debt to a minimum. Buying used schoolbooks is one way to cut costs without impacting your life significantly. Also watch how much money you spend on food, including that morning coffee, as well as costs like gas in your car and minutes on your cell phone.
By making the most of your own money for college, as well as taking advantage of all the free grants and other gift aid available to you, you’re putting yourself in the best position for paying your tuition as well as paying back your college loans.