Responsibility of Student Loans

By Alyssa Laffitte on December 2, 2019

It’s no secret that college is expensive. Many college students struggle to pay their tuition. For that reason, student loans are a popular way for students to make it through college. However, taking on a student loan is a big responsibility. In this post, we will discuss the responsibilities of taking on a student loan. 

Understand your loan type

There are many different types of student loans. Before you accept a loan, determine which type it is, as one type of loan might make more sense for you than another type. For example, federal loans or private loans. You can find federal loans by applying for FAFSA (Free Application for Federal Student Aid). Federal loans are advantageous because you will usually not need a co-signer. As an undergraduate student, you can get a subsidized federal loan, meaning you will not need to pay interest on the loan until you graduate because the government will pay. On the other hand, you can get a private loan through a financial institution like a bank or a credit union. Private loans are better for international students and for students who cannot get a federal loan. However, you will probably need a co-signer or proof of good credit to obtain a private loan.

Do your research to determine which type of loan is better for your personal financial situation. 

Try to pay it off as soon as possible

It goes without saying, but it’s important to pay off your student loans as soon as possible. In fact, you should try to pay off all your debts as soon as possible! You can do this by paying a little more than the minimum on your monthly student loan payments, as you are allowed to pay more than the minimum. This way, you will finish paying off your student loan early. If during a certain month, you happen to have some extra money, put it toward paying off your student loan debt. You will be glad you did!

Know what your interest rate is

When you borrow money, the actual amount you will pay back will be more than the amount you borrowed. This is due to interest. To determine the total amount you will need to pay back, you need to know what your interest rate is. Another reason you should pay your student loan off early is to prevent more interest from piling up over time. Of course, try to obtain a loan with the lowest interest rate possible. Knowing the interest rate of the loan is part of being informed about the debt you will acquire, and for determining the final amount you will need to pay back.

Know that student loans are installment loans

Something you should know before taking out a student load is that student loans are installment loans. This means that when you start making your monthly payments, most of the money will go toward repaying the interest rather than the principal of the loan. Over time, more of your monthly payment will go toward paying the loan principal. For you, this means the longer you take to repay the loan, the more interest you accumulate.

Do not borrow more than you absolutely need to

You might be offered a lot of money in student loans, especially if you have applied for a federal loan through FAFSA. However, that does not mean you need to accept each and every loan you are offered. After earning scholarships and grants, calculate the amount of money you will need to cover the rest of your tuition cost. Be sure to only accept loans of the amount you need, and no more. If you only accept loans of the amount you absolutely need, you will not need to repay as much.

Look for other ways to pay off your tuition

There are ways to pay off your tuition other than student loans. For example, you can pay off your tuition using grants or scholarships. Grants are the best way because you don’t need to pay them back. You can find grants you are eligible for by asking your campus financial aid office or looking on their website. (For example, they can direct you to scholarships and grants geared toward STEM, humanities, or first-generation students.) You can also look at other scholarship matching websites, such as fastweb.com, that will direct you to scholarships and grants you can apply for. Looking for scholarships and applying for them may take time, but it will be worth it. If you win it, you won’t need to worry about repaying it. Invest time in looking at sources other than student loans to pay off your tuition.

Clearly, taking on student loans means taking on many responsibilities. After reading this post, I hope you are more informed about them.

23, ISFJ. Biology student. College lifestyle blogger. Avid reader and writer. Dog lover. Nerd. Boyband enthusiast. Superhero in training. Here to help you become the best you can be!

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