Advice You Need-- How to Make Smart Decisions about Student Loans

Advice You Need-- How to Make Smart Decisions about Student Loans

I’m the best person you can learn from when it comes to student loans. You know why? I screwed up royally and have learned more than your average student in debt.

So what do you need to know to make smart decisions when it comes to student loans?

Plan ahead so you don’t need student loans

This only works for those of you in your first year of high school or younger.  You need to plan your high school career around avoiding student loans.  That means get straight A’s, excel in sports, or consider ROTC. Get active in school and build your resume. 

Why does this help? Scholarships.  Even small scholarships add up. But remember you need to take the time out to apply for them.  I didn’t think it would make that big of a difference in the long run so I only applied for the “easy” ones.  You know, the short essays or questionnaires.  I ended up with about $1000 in scholarship money.  Sounds like a lot, but wait until you see a bill for one semester of classes, room and board.

Don’t take them if you don’t need them

This is pretty self-explanatory.  If you have another way to pay for college, do it. I’m not sure what that way is. Maybe your parents or grandparents offered? Don’t be too proud to accept.  Trust me, their help will change your life.  You can always pay them back after school when you are making money without having to pay $500-$1500 in student loans a month.

Don’t take more than you need

This is the one I missed in undergrad. This is the one I wish I understood better. You get a certain amount of student loans awarded to you each semester.  This will be outlined for you in an award letter. Check how much your classes etc. cost.  Cross out the amount they awarded you and replace it with what you actually need and send it back in.

If you accept an extra $500 to $1000 each semester for spending money, a vacation, or whatever, it adds up! Just think, $1000 extra a semester for 8-12 semesters already adds up to $8000 to $12000 extra dollars before you even think about the interest that is added.

DO NOT FAIL CLASSES

Oh boy.  Seems like another obvious one.  I had some issues in college.  I’m not an amazing A+ student.  I accidently slept through classes once and a while, was too lazy to go, forgot to do papers here and there. It’s hard being on your own for the first time without daily reminders from your parents. But you have to do it.

Just think, if you fail, or don’t meet your grade requirement for your major (make sure you know the guidelines here), you are spending about an extra $2-$3000 a class.  If you have to retake four classes during the course of your college career, you are talking an extra $12,000 tacked on to your bottom line. Again, that is before interest.

Take Gen Eds until you decide a major… like truly decide

I went to college and during the first assembly, I knew what I wanted to do.  So my parents and I all went to the nursing informational session.  While for nursing you need certain classes so I started on those first semester.

Well guess what? I didn’t really want to be a nurse.  Second semester I was taking Math for Elementary teachers. That class didn’t count for shit and guess what? I didn’t end up wanting to be a elementary teacher after all.

Well how about history for secondary education course. Yup, aced that and wasted that.

After a few failed attempts at figuring out my major I landed on Psychology, which has its own demons, but I finally decided.

What did those failed attempts at figuring out my major cost me? Almost $9,000.  Yup.

Talk to your advisor, use them.  That’s what they are there for. They can tell you the classes you will need to be able to graduate from the college.  These are typically called General Education Requirements.  They often fit in with most majors.  Take those first and you’ll waste less of your future.

Know the two types of government loans

Often students are awarded with two loans a semester based on their family’s ability to contribute.  You have a Subsidized Loan and the scarier unsubsidized loan.  What this means is that while you are in school, a subsidized loan does not accrue any interest.  An unsubsidized loan starts charging interest the day you take it out.

If you can, try to keep up with this interest, even while you are still in school, because it snowballs.  Trust me.

When you graduate, pay them if you can

When I graduated with my bachelors seven years ago, I didn’t know how I was going to pay them, so I didn’t. I found ways to defer them. Hell I even went back to Grad School to keep them in deferment. The student loan companies will work with you to a degree so talk to them, pay what you can because again, THE INTEREST SNOWBALLS and becomes unbearable.

If they are in deferment, make your payments to the loans with the highest interest rates.  That’s where you will get the most bang for your buck.

The bottom line

These tips are truly important.  Read up. Don’t just take my word for it.  Read about loans online. Ask your financial aid department for pamphlets.  Ask them questions. It’s what they are there for.

Also- something I didn’t realize, most of us don’t graduate school making six figures.  If we did, I wouldn’t need to be writing this article. Most of us struggle just a bit to find a job before finding out not only would we be making under 6 digits, but we are probably making much less than half of that.

I have spent the last 12 years of my life crying at concerts, regretting going to college, and wishing I had gone about things differently. Don't be me.

Be smart kids.  You are your best advocate.

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September 2013 Blogapalooza Topic: "Give advice to a person, place or thing."

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