Money Sense Tips

When a student applies for financial aid, usually the college will award the cost of attendance and/or a fixed amount.

For example, an undergraduate may receive up to $4000 per year (maximum total $20,000), while a graduate may receive up to $6000 per year (maximum total $40,000).  There are conditions, however.  The amount received depends upon financial need, if any other aid is given, and if the funds are actually available through the college.

It is important that a student does not borrow more than he or she needs.  Tuition, housing (if applicable), books, and incidentals are the important items for a student to consider when applying for a loan.

If you borrow more than is needed, that is more that you will have to pay back, especially if you have applied for an unsubsidized loan.  Think of the interest accrued!

The financial aid office will give the student the maximum amount he or she qualifies for.  That doesn’t mean that utilizing the entire amount is appropriate.  Also keep in mind that some loans have fees, such as the Stafford Loan.  These fees will be deducted from the loan before a check is forwarded to the college.

The best way to determine how much you need is to visit the college website and/or visit the college in person and make notes of approximately how much it will cost per year.  Once you have this information, apply for the loan as soon as you are accepted.

Make an annual checklist of expenditures so that you can keep a running record of how much you spend per year.  If you need to borrow additional funds, speak to the financial aid counselor to determine what type of loan you need and qualify for.

Keep in mind, too, that applying for an additional unsubsidized loan will require that you make interest payments while attending college.  This will cost less in the long run than letting the interest accumulate and paying a hefty sum after you graduate.

If you are interested to find out more, check out StudentLoansMentor to learn how to get a better loan.