It’s back to school time — do you know what your student loans are?
In all seriousness, this is my pet peeve: I have yet to come across a fellow college student who knew much about their student loans. How much have you borrowed? From who? At what interest rate? And the big Kahuna: how much will you owe when all is said and done at graduation?
It doesn’t have to be this way. Ignorance may seem like bliss, but you’re better off learning from my mistakes. Trust me: instead of bliss, ignorance means you get bit in the ass later. Staying on top of things is your real ticket to freedom.
Keep Papers In One Place
I know, I know — it seems like my solution for everything is a manila folder and an electronic folder. But it works! Hang onto all the papers relating to your loans. It may seem like a lot now, but you can weed it down and figure out what’s really important when you actually start repaying.
Keep a text document on your computer with all the information you can get about your loans. Who’s issuing the loan? Do you have a co-signer? How much are you borrowing per term? What’s the interest rate? Most importantly, most loans nowadays come with an online account you can log into — especially the federal loans. Keep all the information you need in order to log into that account. (Figure out how to encrypt this file — this is sensitive info!)
Run the Calculator
Now, and at the beginning of every semester/quarter/term from now on, you should run the Loan Calculator. Use the total loan balance you estimate you’ll have at graduation. There’s two big reasons for this:
1) Make sure you’re on track. The loan calculator tells you how much money you’ll need to make to pay off the loans you’re getting. If the number seems too high, you need to figure out a way to reduce your loans, stat.
2) A wake-up call. You’re in school. You’re paying to be there, whether you like it or not. You’ll have to pay this money back – not even bankruptcy can erase student loans! Not to scare you or anything. It’s just a way to keep the big picture in mind.
If You Don’t Know, Look It Up
Loan stuff all seems like gibberish. Subsidized? Unsubsidized? Perkins? Stafford? Graduated repayment? They don’t really lay it all out plainly for you, do they? Thankfully, you’re going to school in the information age. Don’t wallow in ignorance — put Google to work!
So what if you really don’t know what loans you have, and can’t find the info? You might be able to get a snapshot from the National Student Loan Data System. You’ll need to know your federal PIN, which is the number you use when you fill out the FAFSA every year. Also, check your college billing statements. If you still feel like you’re not getting the full picture, make an appointment with your school’s financial aid office.
This seems all pretty simple, doesn’t it? Keep track of your papers, know how to check your balances, and run the calculator once a term. But if you actually bother to do it, you’ll be ahead of just about everyone else with student loans. Because from what I’ve seen, most people just aren’t on top of the game. Peace of mind: If you’re on top of your loans, that means your loans aren’t on top of you!
Just knowing your what your FAFSA pin is ranks you as an organized person. If you can’t remember it, you will get a prompt. But then, if you guess your favorite color wrong three times, you are out of luck until your new number is activated 5 days later.
I was definitely one of those college students that didn’t really know much about their student loans – but I did know a few things, like one of my early loans was unsubsidized while my later loans were subsidized. I didn’t really get a handle on my loan situation until after I started repayment, then I was on SallieMae.com like a madman trying to figure everything out. These websites are a treasure trove of information and should be visited.
I second this. My first year or so, I was completely clueless, but then I got my act together. Unfortunately, I missed the fact that I had a loan through Direct Loans because the statements were going to my mom’s house. Luckily I caught it before I actually graduated and owed them money. Unluckily I had been reported late while in a deferment. I didn’t find out about that until I looked into insurance on the car I wanted to buy. Now I’m waiting to buy the car until the dispute goes through or I’m going to have a much higher interest rate.
@Vicki – good point! It’s tough, because it’s not something you use every day. Which is why I recommend writing it down!
@Steward and Slinky – thanks for sharing your stories, guys! These are the stories that point out why this stuff is so important to keep track of, and so much harder to track down if you forget about any of it.
Great post and excellent advice!
You’re quite right about many students having no idea who they owe, what they owe, or what they’re going to owe on graduation.
Besides your tips above, I would also suggest that students set up a good budget spreadsheet and update it when they run their loan calculations. Not only is this a good habit to develop, it also lets you see the impact that your spending while a student will have on your total loan obligations and the difference that adjustments to your budget can make on the big picture.
Student loan debt is real for a lot of people.
Some universities have tripled their fees in the last 10 years! Has the education gotten better?
Regardless, there will be a record # of applicants this year, I’m sure.
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Wow – I wish I was as diligent and organized as you in college! Not knowing or caring who I owed money to has me still working today (7 years out of college) to get things cleaned up.
By not paying attention and keeping track of my loans I ended up with private loans in collections. They have been stuck there the entire time and since they are private there does not seem to be a rehabilitation program.
Great advice and great post! Take it from me, not keeping up on this stuff makes it difficult down the road.
@Matt:
Thanks, but I do have to admit, I didn’t start out this way. I had to backpedal and look all this stuff up at the beginning of my third year. I would have been MUCH better off if I’d done it from the beginning, but even doing it midway made a big difference!
Hi Stephanie! I came across your blog recently and being a college student with a lot of student loans, I can relate to a lot of what you are posting.
I also intern for SimpleTuiton, an online student loan comparison tool that allows borrowers to see customized loan details before applying. More importantly, we offer a lot of great related sources for students in college, as well as those who have graduated.
Here is a great article for your readers on what to do with your student loans upon graduation and what to expect. As you put it, student loans are important to stay on top of, yet many students don’t.
http://www.simpletuition.com/resource/students/after-graduation/student-loans-after-school/
Thanks again for the great tips!
Student loan debt has become insane and has made it beneficial for many people to not even attend college. People do not need to go to college if they need an excessive amount of loans. Community college is always a great option.
I have my own blog about student loans and get a lot of enquiries about managing student loans. People simply have no idea how to properly manage their payments or even where to submit their payments. The NSLDS is really the place to go check all your federal loans information. It is also amazing how many people don’t make use of the NSLDS.