The start of a new semester brings with it many new materials, such as new books, new teachers and, for a majority of college students, new student loans.
A number of students are attending college with the assistance of some sort of student loan or financial aid. Although student loans are helpful, they may come with anxiety and fear that, as a result of taking out another loan, students will become financially buried in debt for years to come.
Angellica De Losada, senior psychology major, has taken a loan out every semester since her freshman year.
“Each time I take out a loan, I cringe,” De Losada said. “I understand they are helpful, but I’m just afraid I’ll be in debt forever.”
However, an individual does not have to wait until after graduation to begin paying off their loans. There are steps students can take to help pay for their loans while they are still in school.
Students need to know what loans they have. As stated on the Sallie Mae website, a subsidized loan is a loan in which the government pays the interest until the student finishes school. An unsubsidized loan charges interest to the student from the time the money is first disbursed until the balance is paid in full.
When taking out an unsubsidized loan, it is also crucial to know the percentage of interest attached to it.
Is it 10 percent interest, 12 percent or something else?
It is important to continually track loans while in school so there are no surprises after graduation.
Christine Smith, Sallie Mae representative, said that the way to stay on top of loans is a monthly payment plan.
“Monthly payment plans will give some relief of your loans while in school,” Smith said. “I believe they are helpful because in a way they show a beginning, middle and end on steps to paying your loans.”
Paying a monthly bill also gives practice for frugal financial habits in the future.
The next step is prioritizing loans payments. Each loan will have a different amount of interest, and one loan, due to the interest, may have higher importance than the other.
When paying off loans, it s crucial to stick to a budget. Sticking to a budget prevents impulsive, unnecessary, purchases with money that could go toward loan repayment.
“It is important for people to make paying their student loans a priority,” Smith said. “Often, people miss their payments because they have spent the money on something that was not a financial priority.”
Smart spending and saving, in school and after school, is the key to successful student loan repayment.
In the end, it is most important to remember what the loans are paying for. Whether a student is taking out a student loan every semester or not, it is money going to an education, and students are investing in themselves.