Managing Student Loans

There are two types of costs associated with student loans. The first is to get an accurate accounting of how much money that you actually need to purchase your education. The second cost is the cost of the loan itself.

How much does it cost to go to college? Obviously, that depends on what school and in what part of the country or world it is located. It is relatively easy to get the school to furnish the cost of fees, tuition, room and board, and books. Most new student information will have this included in the preview packet. You can generally find this online also. This will give you a good starting place to figure what your actual expenses will be.

If you plan to have a car on campus, there will be upkeep and fuel expenses. Most schools charge a parking fee. Some charge a fee for the student to have a car on campus above the parking fees. If you like to be involved in student activities, you will need to find out the cost of tickets to attend ball games and other events. Clothing is another cost you will have.

If the college allows it, you may choose to live off campus. In that case, you will determine your own room and board expenses based on how you decide to provide this. It can save some money, but you may have to pay more for auto expenses.

Once you know what it is going to cost, you are ready to determine how to approach student loans if they are needed. When you prepare to apply for or accept a student loan, you need to know a few things about their cost.

Almost all government backed student loans are reduced by a few percent before they are distributed. You may borrow $2,000 and only receive $1,950. The difference is for loan origination fees. However, you still owe the full $2,000. Most loans defer payments and interest until you graduate. Not all do this. You need to make sure what type of loan that you have.

After you leave school, loan payments will begin in about 6 months. You will be given options about payments. The term of the repayment will dictate the payment amount. The interest will float until the repayment term is started. You will then be assigned your interest based on current rates.

It is best if you try to minimize the amount of money that you borrow because you will be at the low end of the pay scale for your profession when you graduate. Extra debt will just make it more difficult to get established financially.