Raysha Duncan, Financial Aid Administrator
If you’ve been paying attention to the news at all lately, you’ve probably seen something about the student loan crisis and the obscene amount of loan debt that college grads have these days.
A lot of us have to take out loans for educational expenses. While student loans are there to help us finance our education, as many of us don’t have the means to pay for college completely out-of-pocket, there are ways to manage the amount of debt you find yourself in after graduation.
So, how do you manage your student loans in a smart way?
Determine How Much Loan You Actually Need
How much do you actually need to cover your bill to the university, your housing, and your books? Purdue provides an estimated Cost of Attendance (COA) to students, and if you’re at another university, it is likely they provide this information to their students, as well. This is a good starting point to determine what your expenses will be for the semester. It requires a bit of math, but what’s a bit of math now if it can save you from paying excess interest in the future?
Loans aren’t there to help you maintain your ‘lifestyle’ – they’re there to pay for your education.
Use Savings from a Summer Job to Pay Expenses
If you worked a summer job, then you earned some money. Some of the money you saved could go towards paying your tuition bill, or you could use it for housing expenses or books. This way, you can decrease the amount of loans you’ll need to take out for the year.
If you didn’t have a summer job this year, maybe consider getting a job during the school year to help cover some day-to-day living expenses and start saving up for the books you’ll need during the next semester.. Consider getting a job or internship next summer to help you avoid taking out excess student loans in the future.
Know your Loan Repayment Options
If your loans are currently accruing interest, you can pay off your interest while you’re in school. Talk with your lender about setting up interest payments. If you have federal loans and aren’t sure who your lender is, then log-in to www.nslds.gov to see your loan balances and lender information.
Once you graduate, you have to start repaying your student loans. If you find yourself unable to make payments using the standard repayment plan, don’t worry. Borrowers have multiple repayment plans to choose from. Be sure to research your options and work with your lender to choose the repayment plan that works best for you.
Learn to Live like a College Student
There’s a reason college students are linked to Cup O’ Noodles – they’re cheap and the average college student doesn’t have money to blow on more extravagant food items. Live that life. Be the stereotypical ‘poor college student.’ Don’t blow your money/student loans on extravagant purchases. Living this way now will help you to avoid living this way in the future. We’re all working hard for our degrees so that one day we don’t have to eat Cup O’ Noodles for breakfast, lunch, and dinner!
Your apartment/wardrobe/plate of food won’t be Pinterest-perfect and may not even be Insta-worthy, but you should enjoy it! College is the time to love thrift shops and decorate with mismatched furniture. . When you’re in your forties, it won’t be cool to sit around your studio apartment in lawn chairs while using your bed as table, but it kind of is right now (or at least it’s expected). You’ve finally got your own place, just enjoy it – don’t worry about making it perfect. Perfection costs more than you’re making or should be borrowing in student loans and that extra, unneeded debt will make your life much less than perfect in the long-run.
College is supposed to prepare you for the rest of your life and this sentiment isn’t just about your education, it’s about your finances too. So go out and have fun, but spend and borrow wisely! You don’t want to have to pay for it later.