The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Information on this website may not be current. This website may contain links to other third-party websites. Such links are only for the convenience of the reader, user or browser; we do not recommend or endorse the contents of any third-party sites. Readers of this website should contact their attorney, accountant or credit counselor to obtain advice with respect to their particular situation. No reader, user, or browser of this site should act or not act on the basis of information on this site. Always seek personal legal, financial or credit advice for your relevant jurisdiction. Only your individual attorney or advisor can provide assurances that the information contained herein – and your interpretation of it – is applicable or appropriate to your particular situation. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, contributors, contributing firms, or their respective employers.
Credit.com receives compensation for the financial products and services advertised on this site if our users apply for and sign up for any of them. Compensation is not a factor in the substantive evaluation of any product.
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.
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.
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.
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.
Image: bayhayalet
August 26, 2020
Student Loans
August 4, 2020
Student Loans
July 31, 2020
Student Loans