How to Keep Your Student Loans from Ruining Your Life

By Uloop Guest Writer on June 27, 2015

Unless you’re one of the lucky few whose college educations are totally paid for, you’ve likely got a hefty student loan balance just waiting to start chewing up your paycheck after you graduate. And, if you’re like a lot of your peers, you’re trying to put off thinking about it for as long as possible.

This is one of those times when fitting in with everybody else isn’t a very good idea.

The longer you put off confronting your loans, the harder it is going to be to deal with them. Here are some of the things you can do to make sure that the student loans you have to borrow don’t ruin your life after you graduate.

Go Federal

When in doubt, go for “public” or federal loans instead of private loans. According to SimpleTuition, federal loans are better because they have better repayment terms and a much lower interest rate than you are likely to get from a private lender. Federal loans are also easier to consolidate and refinance when you’re ready to look at those repayment options.

Work Study is Your Friend

One way to reduce the amount you have to borrow is to opt in to your school’s work study program. Work study is where you get a job–usually somewhere on campus–and earn money that you can put toward your educational expenses.

The program will dictate how many hours you can work and how much you can earn through the program and you can decide whether you want to use the money to pay for out of pocket expenses or put the money directly toward your tuition and, as a result, reduce the amount you have to borrow. Some students also send their work study payments directly to their lenders to reduce their loan balances.

An added bonus of participating in work study is that it allows you to start building up your resume while you’re still in school.

image via bigbirdz on flickr.com

Pay Now, Not Later

One of the benefits of student loans that isn’t available to borrowers of regular lenders is that you won’t have to start paying back your student loans until six months after you graduate. The goal is to give you time to find a good job after graduation so that you won’t get stuck in a terrible paying job because you have to pay back your loans right away. While we appreciate the sentiment, we’re going to tell you to ignore it.

Starting to pay back your loans while you are in school reduces the balance you’ll have to pay later, which will make the payments easier to manage. At minimum you should be paying off the interest that gets tacked on to the balance every month. If you can’t afford that, don’t freak out: anything is better than nothing.

Find Passive Ways to Bring in Extra Cash

Paying on your student loans while you are in school shouldn’t bankrupt you or force you to try to work full time while also carrying a full class schedule. If you’re creative, you can probably come up with lots of ways to bring in some extra cash that you can put toward those loans. Here are just a few:

For example, instead of selling your books back to the bookstore for a teensy fraction of what you paid, sell them directly to students who are taking the course next semester.

If you’re a solid writer, offer to edit and proofread your classmates’ papers … for a fee of course!

Do you have a creative hobby? Open up an etsy shop or sell the things you make to your classmates!

Save Your Pennies

For some reason, in college, most people feel the need to keep up with each other’s spending habits. Not having the same expensive clothes, sound systems, computers, gadgets, etc. can make you feel really bad about yourself. Try to fight that feeling!

Living frugally is a great challenge and it will put you way ahead of the curve after you graduate and you know how to scrimp while your classmates are struggling to figure out how to afford basic necessities like toilet paper.

There are a lot of ways to reduce your spending while you are in school. Here are just a few of them.

  • Getting coffee from the cafeteria instead of Starbucks, for example (or, better, make your own using a french press).
  • Buy books for used prices from your fellow students instead of at full price from the bookstore.
  • Cook pizza in the dorm kitchen instead of ordering delivery.

The point is this: you don’t have to live in fear. If you start taking the right steps now, you shouldn’t have any trouble making the shift from college life to financial independence.

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