Mistakes I made so you don't have to!

Document created by michaelz on May 18, 2016Last modified by amara.mastronardi@socialedgeconsulting.com on Dec 5, 2016
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Just because a loan is available, you don't NEED to take it;

 

Is it easy money? Yes! Will it end up costing you in the future? OMG YES. Take only what you truly need. If it means you bust your butt in the summer or go without a car during your undergraduate, then you should do that.


Pay your interest as you go so you only have your principle to pay back;


It is not so much money, maybe $20-30 a month (the cost of two Chili's runs). Keep in mind, if the interest goes unpaid, it just adds to the principle. Now, next month, you pay interest on that interest (which just sounds terrible).


Look into programs that will have loan forgiveness post graduation (AmeriCorps, Bonner, Peace Corps, Non Profits)


When I graduated, I completed an AmeriCorps term of service: not only did i have a loan reduction of $6,000 to use, but I also called my Perkins Loan lender and they forgave 15% just because I asked. The Bonner foundation also gave me a $2,000 loan reduction when I graduated. Also, keep a look out for your state incentives: If you work in the non profit sector in Florida for 10 years and make your minimum payments, your remainder of laons will be forgiven.


Private loans are the DEVIL.


They have higher interest, you will need a cosigner, there is less leniency. First, go for the subsidized, then the unsub, then Perkins if you need to. If you have to go beyond that, you should do some shopping at other schools for more financial aid. Keep in mind, they will want that money back and before you know it you have a $500 a month student loan payment for 30 plus years.

 

Be proactive post grad!

 

I immediately, when entering the non profit sector, applied for income based repayment. It was a fairly easy process, and they base your monthly payment on your income. I pay more each month, but it is good to know my required payment is very, very manageable. Also, don't be afraid to ask for deferment. Better to have to wait then go into default.

 

If you want to build your credit, do so carefully!

 

Did you parents get you a car? Are they making the payments for you? Ask them to put the payments in your name. If they are willing to pay it anyway, why not get some good credit activity to your name! Also, I avoided credit cards all together. However, some of my friends had credit cards for gas stations because they traveled home so much. This is good because there is only so much trouble you can get into, since the card will only work at the gas station and probably has MAX a $500 limit.

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