college finance tips

College can be one of the best times of your life, albeit stressful and difficult at times, but a valuable point in one’s personal life and growth. It can also be one of the most expensive. The average 2016 college grad left college with $37,172 in student debt. Before you hit the books, here are four important tips to help you keep your college expenses in line.

1. Know your financial options

Most students can’t pay for their entire college out of pocket, which is why most rely on financial aid. 

There are many scholarships out there that can help you save money and avoid borrowing. One resource is the U.S. Department of Labor’s research tool at www.careeronestop.org.

If you do have to borrow money -- don’t worry, most do -- understand the differences among the various student loans available to you. For example, what's the difference between subsidized and unsubsidized loans?

  • Subsidized loans are issued by the U.S. Department of Education through servicing companies like Sallie Mae or Navient. Subsidized loans do not accrue interest while you are in school, meaning you will owe less after graduation.
  • An unsubsidized loan is another type of federal student loan. However, you will accrue interest during your time in school.

For both types of federal loans, payments are typically deferred as long as you are at least a half-time student. After your deferment ends, the interest you pay on your student loans can be deducted from your taxes each year.

In addition to federal student loans, students may also need to access private student loans offered by financial institutions. Private student loans often have higher interest rates and few repayment options. However, unlike federal student loans, there are no caps on the amount you can borrow.

2. Cut expenses

Look for ways to save money, like selling your car and using public transportation, making meals at home or sharing a Netflix account with your roommate.

3. Budget

When it comes to college, you are busy with classes, a part-time job and a social life. You need an agenda or planner to keep you organized. The same is true when it comes to your finances. Have a running tally of what your costs are each month. There are a variety of ways to create a budget and track your expenditures, including apps and online tools, your financial institution's online banking or even an old-fashioned check register.

4. Build your credit

The simplest way to establish a credit history is to get a credit card. However, be careful and use it responsibly. Review credit card options with your parents or guardians before you head back to the college campus. They can help provide insight into the best card option as well as serving as a co-signer if needed. The best plan to build your credit is to use the card each month for a set purchase like gas, then when you receive your statement each month, pay it off in full. This will build payment history while avoiding excessive interest.

Look for a credit card that has no annual fees, a rewards program and a decent interest rate. Consider getting a credit card from your local credit union -- they often have lower interest rates and lower fees.

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