Student Loans: To be in Debt or Not, That is the Question

Dear incoming (or current) college students,

You are about to embark on one of the greatest, and hardest, journey of your life. You will laugh, you will (definitely) cry, and most importantly, you will learn. You will learn in the classroom about your specific degree, but you will also learn about life in the world around you with people who care and people who don’t care about you.

Good things will happen, and plenty of bad things will happen. What is important throughout this time is that you don’t give into the hardships and you come out your strongest self!

One hardship that most (okay, let’s be honest: EVERY) college student faces is paying their tuition. Some students have family that will pay it for them, some students don’t have family at all and rely on multiple jobs, some rely on a scholarship, work-study programs, etc, and some really on STUDENT LOANS.

Student loans.I know, those words make me cringe too!

One of the biggest decisions I ever had to make was whether or not to take out a student loan. It’s a big decision, with big drawbacks, and can be a heavy burden to bare once all is said and done.

Below are some things I wish I knew ahead of time before taking out my student loans:

In total, I took out about $20,000 in student loans through FAFSA (financial aid). A few were under subsidized loans, and a few were unsubsidized. I defined these terms in my last post (College Graduate: A How-to On Surviving Life After Student Debt).

1. There are two types of student loans

Federal loans can be divided into subsidized and unsubsidized loans. Subsidized student loans are given to students who have financial aid (through FAFSA), and the government pays the interest on the loan while you are in school, rather than letting the interest accumulate on the loans until you start paying. Unsubsidized loans are available to all students. The draw back to this loan is that students are responsible for paying the interest on the loans.

2. You can look into private loans if your financial aid package does not cover the cost

Although FAFSA (your financial aid package) typically awards students plenty of loan aid, the amount sometimes does not cover it. The best way to find private loans is to go through your school’s business office. There are plenty of scams out there, so being cautious of where you get your money from is important! Your school will have a lender list, which is put together by your school and offers a look at who they work with and which loans might be most helpful to you.

3. You do not have to start paying immediately after graduation

After I graduated from college, I had a slight melt down. I knew I had student loans to pay off and I knew which company my loans were under, but I didn’t look into them throughout my college career, because loans were on the back of my mind. BAD IDEA. Because once I realized I needed to start paying soon, I freaked out. I worried my loans were going to have to be paid immediately and I still hadn’t found a full-time job yet!

Thankfully, once I logged into my account and did some research, I realized loan companies offer a “grace period“. A grace period is a time of about 6 months after graduating in which you do not have to pay your loans. This allows you some time to find employment and get your finances straight in order to pay off your loan.

4. Student loan forgiveness is a thing!

I definitely should have looked into this one while taking out loans. Your student loans can be forgiven, but a few requirements must be met. Forgiveness requires that you either have a job with government organizations, not-for-profits and other types of qualifying public services like law enforcement, teaching, and military service.

5. Paying while you’re in college will benefit you

Like I said before, I knew I was taking out loans, but never looked into my account because I thought why worry now? Take it from me, worry now.

If I had looked at my  account earlier, I would have realized I could start paying while I was in college, any amount I wanted, daily, weekly, or monthly. This payment would go to my interest rate on my unsubsidized loans and to the overall amount. Because I did not do this and I waited, my interest rate had accumulated so that once my grace period was over, I was paying off the interest rate first before even getting to the actual loan amount.

Moral of the store, pay early if you can!

Ultimately, taking out loans is a tough decision, but it’s one that most students have to make. I was reluctant to take out loans at first, but realized that finishing college and doing well was important to me, like it is to most students. So if you’re not sure about whether or not you should take out a loan, talk to your family and your school’s business office. It’s not an easy road to repayment, but it can be a rewarding one if you let it.

“Get learning with a great sum of money, and get much gold by her.” – Ecclesiasticus 51:28

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