The first step to being a smart borrower is knowing how much money you need to borrow
Before you accept your student loan offers for the school year, you should sit down and create your personalized budget. When you are creating your budget, take tuition, fees, and your monthly living payments (e.g., rent, utilities, grocceries) into account.
Once you have created your budget, do your reserach on the different loan options available.
Federal Student Loan Options for Undergraduate Students:
- Federal Direct Ford/Stafford Subsidized Loan: The government pays the interest on this loan for you while you are enrolled in at least 6 credit hours of classes.
- Federal Direct Ford/Stafford Unsubsidized Loan: Interest will start accruing on this student loan while you are enrolled in school.
Federal Student Loan Options for Graduate Students:
- Federal Direct Ford/Staffor Unsubsidized Loan: Interest will start accruing on this student loan while you are enrolled in school.
- Federal Graduate Plus Loan: Interest will start accruing on this student loan while you are enrolled in school (interest is generally higher than the Unsubsidized Loan).
Once you have done your reasearch on the different types of loans, choose how much you need to accept. Remember that each year you should pay attention to the interest rates on each loan you borrow.
The second step to being a smart borrower is being financially aware
Upload your Federal Student Loans to iGrad's Loan Portal. This way, you can constantly track how much money you have borrowed and to whom you will start making payments to. By keeping track of the total amount of loans you have borrowed, you are preparing yourself for the monthly payments you will have upon graduation.
Make payments on your student loans early. There is no pre-payment penalty, so take advantage of that. If you have borrowed a Federal Direct Unsubsidized Loan, try to pay off some of the interest while you are in school. Any payment helps.