College Student Loans Money Savings Tips, Ideas and Advice for Reducing College Costs

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“College Savings Advice & Tips On How To Get A Low-Cost College Education”

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STUDENT LOANS/JOBS

Student Loans & Campus Jobs

If you can’t afford college expenses and sufficient scholarships and grants are not available, student loans and campus jobs can help fill the void (search for scholarships and student loans here).

1. Student loans are available through the federal and state governments. Check with your high school counseling office, your State Department of Education and the Federal Department of Education for government loans. A free booklet titled The Student Guide is available from the Federal Student Aid Information Center (800-4-FED-AID) that lists available loans and other student aid. Students can apply for education loans through the government application process at www.fafsa.ed.gov, at their school’s counseling office or financial aid office or at banks.

2. Generally, federal or state loans are more affordable than private loans and offer better terms. The government offers several types of loans to students, with the cap on the loan generally set by the school you are attending. Government agencies will use several factors to determine the type of loan you can obtain, including income level. Some loans are subsidized, with the government paying the interest on the loan, and other loans are not subsidized with interest accruing while you are attending school.

3. For students who don’t qualify for government loans, for whatever reason, there are private loans, generally from banks. Bank loans require that the student has established a sufficient credit history or has a co-signor that has. These loans generally have a higher interest rate and less favorable terms.

4. Keep in mind that each time you apply for a loan you may be offered different loan terms, depending on changes in your or your parents’ financial situation and market conditions. So if you at first do not succeed, try again.

5. While often difficult to arrange, a loan or gift from a relative or friend may also be available to help fund your college education. Generally, gifts paid directly to a college for tuition are tax free to the student and do not incur any gift tax. Make sure to check with a qualified tax advisor.

6. Remember, student loans need to be repaid. Keep in mind the following:

a. If you have more than one student loan and their interest rates are higher than what’s currently on the market, you may want to consolidate your loans. Combining all your loans into one larger loan may significantly reduce your monthly payment, although it may extend the term of the loan. However, don’t combine private loans with government loans, or you may lose federal benefits such as deferments and subsidized interest.

b. Choose the repayment option that is right for you. Options available may include fixed monthly payments, monthly payments adjusted based on your annual income, and graduated payments where initial payments are low and gradually increase.

c. Consider automating your loan payments so you won’t make a mistake and be late. Many lenders will offer a reduced interest rate for loan payments made directly from your checking or savings account. If you do not have the funds to make a monthly payment, contact your lender to try to work out a solution.

d. Ask your lender if they offer incentives, such as a cash-back program, for good repayment performance.

7. Another potential option for repaying student loans is the military college loan repayment program. If you enlist with the military after college, the military will make payments directly to your lender to help pay off your loan. Each branch of the service has different qualifying criteria, so it may pay to inquire with each branch.

8. If you are a federal government employee, the Federal Student Loan Repayment program permits agencies to make loan payments on certain employees’ federally backed loans. Payments can be as much as $10,000 a year for a total maximum benefit of up to $60,000. Look up this program on OPM.gov/oca/pay/studentloan.

9. If you volunteer for certain programs, some of your loan may be forgiven. Look at FinAid.org/loans/forgiveness.phtml for a list of loan forgiveness programs.

10. When all else fails, consider a work-study program at your college. Many schools like to hire work-study students because the government often subsidizes part of the wages paid to the student. Also, unlike most scholarships and grants, money earned is paid directly to the student, providing more flexibility on how the money is used. The work hours are usually very flexible, allowing sufficient time for classes and studying. Resident assistant positions may also be available in college dormitories, which generally provides free room and board.

11. Off-campus jobs are often available. Try to find a paying internship or a job that provides experience relevant to your chosen field. You may even be able to turn this work experience into college credit.

12. Information for prospective homeowners: Learn about the advantages of home ownership whilst gaining an understanding and comparison of mortgage rates before making any decisions. A larger family can also compare jumbo mortgage rates for a larger home.