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Nov 01, 2018 06:07 PM EDT

A Simple Guide For Staying On Top Of Your Student Loans

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A full ride scholarship. A broke student tears into it like it's their Golden Ticket, but instead of a psychedelic tour of a chocolate factory, a full ride promises something much better. It covers every cost a student might face, including tuition, textbooks, room and board, and sometimes even living expenses.

But like the Golden Ticket Charlie Bucket found in a Willy Wonka Bar, these full rides are limited. Fewer than 20,000 students earn them each year, amounting to roughly 0.3 percent of the student body. The remaining 99.7 percent of undergraduates have to pay their own way, juggling savings, bursaries, and loans to cover the bills. At last count, 7 in 10 students take out loans to help them graduate. If you're one of them, you need to make sure you understand how your loans can impact your finances. This quick guide will help you make the right choices when it comes to what you borrow.

Think about your school

Next to getting a full ride scholarship, enrollment at an Ivy League university is one of the most sought-after things in academia. But it's a privilege few students can afford. In the 2017-2018 academic year, the average Ivy League university cost an undergraduate $51,486 in tuition and fees. Compare this to the average community college, which cost just $3,440 in the same year. Amounting to a yearly difference of $48,046, these schools prove that where you attend has a huge impact on what you'll pay.

Be honest with your needs and wants

Though the fall semester is almost done, you still have time to reassess your needs as a student. Is your school more expensive than other options? If so, is there a reason why you should pay more, i.e., will you graduate with a prestigious degree that will help you earn more?

These are the kinds of questions you need to ask to separate your needs from your wants. If you're only going to a more expensive out-of-state school to get away from your parents, it's time to reconsider your choice of campus.

Learn more about your degree

Making decisions about your future when you're only 18 is overwhelming. The pressure to make the right ones can leave you feeling stuck. Though you'll never know for certain that your degree will lead to your dream job, being informed about your degree can help you feel more secure about your choice.

Not only will you know more about what your degree will do for you, but it will also help you understand its impact on your future finances. Just as tuition in different departments will vary, so will salary streams differ from degree to degree. Knowing what you could expect to earn will help you figure out how quickly you could repay your loan.

Most financial advisors suggest students should be able to pay off their loans in 10 years or less. To see if this is a realistic goal for your current loan load, you can check out resources like the Government of Canada's Wages by Occupation Survey, the Bureau of Labor Statistic's Occupation Outlook Handbook, and even Indeed's Salary Comparison to find out what earning potential your degree and field of work could hold.

Know what you owe

Once you know what you can expect to earn once you graduate, knowing what you owe is an important step towards managing your money responsibly. Otherwise known as the fine print, the terms and conditions of your loan(s) will let you know what this figure is. How much you owe now will impact how you pay it off later, affecting everything from the interest rates to your repayment schedule.

In many cases, students won't have just one student loan; their financial assistance will come in the form of multiple federal and private student loans. Some might even strengthen their budget with personal loans. If you aren't sure what the difference is between these kinds of loans, Student Loan Hero offers a complete guide to your options.

Basically, payday loans come with shorter terms than a federal student loan, meaning you'll likely have to repay it before you're done graduating. That's why lenders like GoDay recommend their customers have a full-time job before they apply. In certain countries like Canada, the shortened terms reflect an expedited borrowing experience. One of the benefits of getting a payday loan is how quickly you can receive it. The best payday loan Canada has to offer will connect you with cash in as little as one day with no need for collateral.

Most federal and private student loans are slow-moving in comparison. It will take time to apply and it will take time to receive your cash, but it's balanced by a longer term that gives you some flexibility when it comes to your repayment. They also provide deferment services for the recently graduated, meaning you won't have to repay your loan right away.

The bottom line? It's time to participate in your financial future

You won't know about your loan until you check in with your lender. Keeping tabs on your loan profile throughout your academic career is an important step towards financial responsibility once you leave campus. Don't forget about the extra costs that add up, especially the unnecessary costs.

One of the easiest ways to overspend is buying things can be reused, like water bottles. While it may seem like a 'small thing' to just grab water always on the go, buying water can add to a couple hundred bucks a year when compared to using a reusable water bottle that will last for a whole semester.

Taking out a loan isn't a sign of failure. In today's economic climate, most students need to rely on financial assistance to graduate. Though it's an essential and unavoidable part of your education, this doesn't give you the freedom to choose your loan poorly.

If you just started your academic career, the day you need to repay your loan may feel like it will never arrive, but it will be here sooner than you may think. Once it does, you'll be expected to handle your student debts like an educated adult. To give your future self the best chance of paying these back, you should invest time now to manage your loans.

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