Debt Management

When accepting loans, we want you to become an active partner in achieving that goal. Take the time to read and learn your rights and responsibilities when you sign a promissory note for any loan. Remember that you are signing a legal document.

Promissory notes detailing the terms of your loan and disclosure statements showing the loan amounts guaranteed provide valuable information on determining your loan repayment schedule. Keep copies of these important documents together in a file.

Your education is an investment in your future. But are you borrowing to pay for an education or a lifestyle while in college? Have you set up a budget to keep yourself in financial order?

Borrow only the amount of loan that you need. Federal Subsidized, Unsubsidized and PLUS Loans are offered at maximum levels in order for you to know your full eligibility. Before accepting loans on your Award Offer, determine what you truly need to cover your expenses. What expenses can you cover from other aid sources? From savings? From part-time employment? From other resources? Also, what expenses can you reduce or eliminate?

Accepting loan money can be easy. Repaying it can be more difficult. It is helpful, when considering how much to borrow, to examine what you can reasonably expect to repay upon the completion of your academic career.

Look at your total loan debt but also at the expected monthly repayment associated with your loan. Think about what other expenses and debt you will have as you begin your first job. Credit card purchases are part of your overall debt and should also be limited.

Knowing your loan responsibilities is very key. Therefore, in addition to loan counseling prior to receiving loan funds, exit counseling is required any time a student borrower takes a break from enrollment or graduates. However, some students complete the exit counseling process while still enrolled simply to be reminded of key issues surrounding their student loans.

Life is full of choices. Living more frugally when in college can allow you to graduate with less debt. It is far easier to reduce expenses than increase income. Understand how the spending choices made in college can follow you for many years to come.

Do you track your loan debt? As a consumer, you can check on how much you have borrowed to-date by logging on to the Federal Student Aid website. You can also use tools within the Website to understand your repayment amounts based on the size of your student loan debt.

NSLDS will only help you track your federal loan debt. Borrowers of alternative loans have additional student loan debt that they have accepted and will need to track as well.

In the end, while your education may be a good loan investment, you also need to keep an eye on your future so that you can have a manageable repayment upon graduation. Recognize that you will have other expenses as you begin your career as well so do what you can now to keep your reliance on loans while in school to a minimum.

When borrowing loans, you want to do so with your monthly repayments in mind. Eventually you will be in repayment. You don't want to borrow so much that your standard of living while in repayment is compromised more than it is when you are borrowing.

Consider your repayment amount on your current borrowing level as well as your projected levels assuming additional borrowing to take you through your degree. What will be your anticipated cumulative loan debt and monthly loan repayment amount?

What will be your income? While you can review salary levels for positions, be realistic in what your entry-level salary will be. Understand that approximately a third of your gross salary is already spoken for in the form of taxes, Social Security withholdings, health insurance, and other up-front deductions.

Your net income (salary x 70%) when divided by 12 will give you an approximation of your monthly take-home pay. What other monthly expenses will you have beyond student loan repayment? Rent and food will begin this listing, but you may also have car payments, insurance and credit card debt to assume. Is your loan borrowing now making it more difficult to live your desired lifestyle in the future?

Working to live like a student now and relying less on loans for items beyond tuition can make a world of difference in your future finances.

We understand that you may have to borrow to pay for your education. Most students do. Just use sound judgment with an eye on the future and repayment.

Common statements after college are "I wish I would have paid more attention to my loan borrowing" and "I should have borrowed less and earned more for my expenses while in college." Few college graduates, when facing loan repayment, say, "Is this all I have to pay each month? I should have borrowed more."

Online sites like Mapping Your Future offer students excellent Web tools on personal financial management.

Students can also track their loan borrowing via the Federal Student Aid website.