Borrow Conservatively
Federal student loans offer low interest rates which can make them a
great benefit to students, but your total loan debt can add up quickly!
Students and families should only borrow the minimum amount of loans
needed to meet your educational costs. This is called borrowing
conservatively.
Reduce or Decline Your Loans
If you don't need the loans you are awarded, you can reduce or decline
them in three ways.
- Change your Electronic Financial Aid Notification (E-FAN).
- Contact the OSFS.
- Contact your lender.
If you discover later in the semester that you need the reduced or declined
loan money, it can generally be re-awarded (The Perkins and B-On-Time loans
come from small programs and funding is often not available later in an
academic year.)
Money Management
Borrowing conservatively means borrowing only the amount of money you need.
Don’t get carried away! Remember that you have to repay a student loan,
just like a car loan or a mortgage.
One of the best strategies for borrowing conservatively is to come up with
a budget at the beginning of the academic year in order to determine if you
need to borrow a student loan.
Steps to creating a budget:
- Expenses:
Add up your expenses for the academic year: tuition and fees, room and board, books, travel and other miscellaneous expenses. - Financial Resources:
Add up your financial resources: financial aid, scholarships, money that your parents will give you, money you’ll earn by working while in school, etc. - Do the math:
Subtract your financial resources from your expenses. If your expenses are higher than your financial resources, you may want to consider borrowing a student loan or reducing your expenses.
Estimate Your Loan Debt
When determining the amount of loan money to accept, consider how much
debt you will have to repay after you graduate. Ask yourself the following
questions before you decide how much loan money you need to borrow:
- How much are you borrowing to get through school?
- How long will it take you to pay off your student loans?
> Use the Adventures in Education Loan Calculator to get an estimate. - Will you be able to realistically handle your debt
when you get a job in your field of study?
> See the Occupational Outlook Handbook to get an idea of salaries in your field.