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Many students have no choice but to borrow money to fund their education. But you or your child still have options when it comes to how much you borrow. The tips below can help you calculate the right amount to borrow to pay for college – and it doesn’t always mean taking every dollar you are offered in financial aid.

1. Research Costs

A little exploration can go a long way in deciding what loans are reasonable and manageable. It’s important to determine exactly how much money you need by adding tuition, school materials, housing, transportation, food and other school-related or living expenses. It’s also a good idea to consider the month-to-month implications of the loans you aim to take out. You can look into your likely cost of living and earning potential post-graduation by finding statistics on recent graduates from your school or in majors you are interested in. Some experts advise that you do not take on debt that equals more than your expected first-year salary.

2. Look for Supplements

Next, it’s important to look into ways you can cut down on the amount you would need to borrow. You may want to look for any way to cut costs, from living at home or with a roommate, renting your textbooks, cooking meals at home and taking advantage of student facilities and discounts. Creating a budget can be a big help in finding opportunities to spend less and save more.

It’s also a good idea to try to find alternatives to taking out loans. This includes looking into scholarship and grant opportunities. You may consider taking on a paid internship, side job or work-study position. You could also find other creative ways to make income. There are also various tax benefits, like the American Opportunity Tax Credit or Tuition and Fees Deduction, that can provide a federal income tax credit to help pay for your education. If these strategies won’t cover it, you can consider alternatives such as attending a cheaper college or attending community college for two years and then switching to a four-year institution.

3. Take Only What You Need

Remember, student loans aren’t free money. You will have to pay back anything you borrow – plus interest.  Instead of taking the maximum amount offered and using anything extra for living expenses or mindless spending, it can be a good idea to take only what you absolutely need. This way you don’t end up paying for that spring break vacation for years or decades. (Remember, how much student loan debt you are carrying will have an affect on your credit score. Upon graduation, you can monitor your credit by requesting your free credit reports each year from AnnualCreditReport.com or viewing your two free credit scores each month on Credit.com.)

Even though college is expensive, you can work to find the right loan for you or your child. It’s important to choose a loan that can cover all college needs, while having a realistic and affordable repayment plan.

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