Your college education is one of the most important investments you’ll make in a lifetime. It might also be one of the biggest. The reality is, even with the help of scholarships and grants, many students and their families depend on loans to help pay for college. And deciding on your best financing options can be challenging. As Director of Student Financial Services at St. Edward’s, here’s the top advice I share with students and parents for successful borrowing.  

1. Consider federal loans first.

The benefits of federal student loans typically outweigh any other loans you’ll acquire. For example, interest rates are fixed and generally lower than private loans, and the interest on federal subsidized loans doesn’t accrue while you’re enrolled in school at least half-time. Repayment options are more flexible and can be based on your income level at the time you begin repayment instead of the amount you borrow. And you may be able to have a portion of your loans forgiven if you work in public service. You can apply for federal loans by filling out the Free Application for Federal Student Aid (FAFSA).

2. Only borrow what is necessary to finance your education.

Remember: A loan is money that must be repaid and will accumulate interest. You should only borrow what is absolutely necessary to help with your education. This will make a big difference in the amount you owe when you start to repay your loan.

3. Know your student loan servicer and the terms and conditions of the loan.

You can learn all about your federal loans online through the National Student Loan Data System. In addition, you’ll receive a disclosure statement from your lender that outlines the loan’s terms and conditions. Be sure to read the fine print and discuss all available repayment options directly with your loan servicer since repayment plans can vary. 
 

4. Create a budget and stick to it.

Do you really need the latest mobile phone or a $4.50 cup of coffee everyday? Look at your income and expenses and review your wants versus your needs. Keep track and adjust your spending priorities to meet your budget. And when you begin repaying your loan, build a strong credit record by automating your payments to ensure you pay on time.

One of the best ways to plan for your college expenses is to meet with a St. Edward’s Student Financial Services advisor early in your college-decision process. We can answer your questions and help you develop a financing plan that meets your needs. seu.finaid [at] stedwards.edu (Email us) or call 512-448-8523.

Jennifer Beck is Director of Student Financial Services at St. Edward’s University.