The cost of higher education continues to rise, making it difficult for the average person to pay for it without aid. If you are considering taking out a student loan, there is a lot to consider before committing to one.
What To Do Before Taking Out a Student Loan
According to the U.S. Department of Education, the cost of borrowing has also risen over the last two years. What can you do?
- Study your spending habits before considering a student loan and create a monthly budget. See if making small adjustments to your spending can help you avoid the loan or allow you to borrow less.
- Apply for scholarships and grants! You will be surprised how many scholarships and grants are out there to help.
- Take time to research different loan options. You must understand the fine print on any loan to know what interest rates and repayment options come with that loan. Knowing all the ins and outs of your student loan will help you budget and stay on track with repayment.
- If/when you get a student loan, only use it for school expenses, not luxuries. Do not use that money for fun. Taking the money for fun now will have a huge impact on what you need to repay later.
Already Repaying a Student Loan?
You are not alone! There has been an increase in the amount of student loans issued which has resulted in $1.5 trillion in student loans, according to the Federal Reserve.
- Reach out to your lender for options – Working with your lender can result in a repayment plan that benefits both of you.
- Deferment or forbearance – Keep in mind that interest will still accrue while you are not making payments, which can drastically change what you owe.
- Consider refinancing to lower interest rate – This option is best when you have good credit, as you will take out a new loan with a lower interest rate.
- Make sure you have a repayment plan for yourself – Take time to strategize the best way to pay off your loan(s) with the highest interest rates.
- Consult the Federal Student Aid website – You will find more information on student loan forgiveness, cancellation, or discharge here.
Still Worried About Student Loan Debt?
Consider talking to a professional to help you manage your debt. Remember, you do not have to do this alone. If you are struggling with student loan debt, contact our office for a free consultation to find out what are your best options.