Smart student loan borrowing
Be financially savvy when figuring how much you need to borrow to attend college.
It is that time of year where you will begin to receive financial aid award letters from your school(s) of choice. This letter provides you with the amount that you have been awarded in financial aid from the educational institutions you are interested in attending. It is a collection of grants, work-study and federal student loan options. Financial aid award letters help you understand how much out-of-pocket money you will need and other potential funding options.
Before you begin to calculate what you may need financially, take a close look at the financial aid award letter. Often, the cost of attendance includes tuition, fees, room and board, books, supplies, transportation and personal expenses. Evaluate the cost of some of these items to see if you need to budget that much for the year. Many times, you can do it for less than the educational institution’s projections. Do not automatically accept all loans that are offered to you; only borrow what you need.
When taking out student loans, start by educating yourself on the different types of loans available. The better you understand your options, the better choice you will make. Also, try to exhaust other possible options, such as scholarships, for funding your education.
Financial Aid Administrators are finding that students who take advantage of financial management education courses offered through their schools manage their loans and finances better. If your educational institution offers such a course, it is encouraged that you take advantage of this opportunity. Most offer financial management courses as an elective credit course. The information you will learn will be invaluable for a lifetime.
Michigan State University Extension offers a number of educational programs including programs on financial management and housing education. Visit MIMoneyHealth.org where there are a number of educational materials and resources available for free.