1. Read EVERYTHING- Students often flippantly sign their promissory notes without taking the time to fully understand the conditions, options, and responsibilities of their loans. You must read everything. I know the fine print is crazy and the verbiage dense and unclear but, your future financial health rests on the decisions that you make at this stage. Educate yourself so that you are positioned to act responsibly.
2. Keep Accurate Records- Don’t rely on your financial aid office/counselor or your lender to keep track of your loans, take responsibility and track this information on your own. Keep a record where you list every loan that you have. Be sure to include the name/type of the loan, the loan amount, and the name and contact information of the lender. You can also include information such as interest rate, deadlines and due dates here as well. This will help you keep track of your total debt and protect yourself against fraud/identity theft as well, Once you begin making payments, you can use these records to track those as well.
3. Borrow Only What You Need- Often times students borrow more money than they need to cover additional miscellaneous and unnecessary costs. For example, the refund check hustle. Many students will excessively pad their loans to keep from having to work during the school year and/or to sponsor shopping sprees and live beyond their means. The number of refund checks squandered at the mall is ever increasing. Instead of applying for an on campus job many students opt to use student loan money to sustain themselves. This is very easy to do but really it’s very dangerous and quite irresponsible. Especially for those students eligible for federal work study. It’s very easy for us to get carried away and borrow more than what we need with the idea that “we’ll just pay it off later. “ Easier said than done. You always want to be mindful of what your total debt is. If your total debt exceeds twice your expected starting salary you are borrowing too much.
4. Open Your Mail- Read every piece of correspondence from you lender and do NOT ignore delinquency notices. Lenders are typically very transparent if your loans are in trouble you will definitely be notified. Take this seriously. If you find yourself in a bad situation, call them and try to rectify it before it’s too late.
5. Always Communicate with Your Lenders- If you move or if you name changes or if anything changes in your life that will impact your loan repayment you MUST notify your lender. Also make sure that they are notified if you transfer from one school to another, graduate, take a leave of absence or terminate your studies. Your lender should always have accurate/up to date contact information for you. Additionally if you experience temporary financial difficultes or have trouble making your payment, contact them and inquire of your options for the payment assistance (forbearance/deferment , graduated payment options, etc.) *Bonus* Inquire about increasing the term of loan as well. ( For example increasing a 10 year term to a 15 or 20 year term) Doing so can decrease your monthly payments by up to a third.
6. CONSOLIDATE- Personally I found it easier to combine all of my student loans into one big one. In doing so, I only send my payments to one lender and not fifty-leven. Keeping up with all of those separate payments completely frayed my nerves. *shudders* Additionally, in consolidating you may even be able to extend the term of your loan to decrease your monthly payment even more.
And last but certainly not least,
7. PAY YOUR BILLS ON TIME- This is pretty self explanatory, but if you have the money to pay your loans, PLEASE DO SO! I can’t stress this enough, make your student loans your priority. This is not a bill you want to skip around on or wait a month to pay. I know it gets daunting and you start to think. “ Lord, I’m not even making a dent in these loans” but just keep at it. We’re all in the same boat. It’s going to take a while but we’re going to get this done. I'm right there with you, up to ears in debt but working through it. All we can do is focus on one payment at a time. Trust me hunny, we gon' make it!
I hope this was helpful. In the next post in the series we will discuss what you can do if you find yourself in student loan default.