The first step in getting student aid is completing the Free Application for Federal Student Aid (FAFSA) at . You must do this every year.
Borrow Only What You Need
You must repay a federal student loan, even if you:
- Don鈥檛 complete your program of study.
- Can鈥檛 find employment after graduation
- Aren鈥檛 satisfied with or didn鈥檛 receive the education or other services you expected and paid for with your student loan.
Control How Much You Borrow
Borrow as a last resort and only borrow what you need. You don鈥檛 have to borrow the maximum amount of federal student loans each year you can request a lower amount through your school鈥檚 financial aid office.
Loan Basics 鈥揟erms You Need to Know
Interest Accrual
- Direct Loans are 鈥渟imple daily interest鈥 loans. This means that interest accrues daily.
- The amount of interest that accrues per day is calculated by dividing the interest rate on your loan (as a decimal) by the number of days in a year, and then multiplying that by the outstanding principal balance.
- For example, on a $ 10,000 Direct Unsubsidized Loan with a 6.8% interest rate, the amount of interest that accrues per day is $ 1.86: (0.068/365 X $10,000 = $1.86).
Capitalized Interest
- If you are in a deferment or forbearance for 6 months, the loan will accrue interest totaling $340.
- If you don鈥檛 pay the interest, it is capitalized (added to the outstanding principal balance). You will be charged interest on the increased outstanding principal balance of $10,340. The amount of interest accrues per day will increase to $1.93 : (0.068 / 365) X $ 10,340 = $ 1.93
- Under most repayment plans, this capitalized interest will increase your monthly payment and the total amount you pay over the life of the loan.
Manage Your Expenses
- Got to this website for help in deciding school expenses.
Tips for Borrowing Responsibly
Borrow only what you need.
Consider using money earned at a part-time job to reduce borrowing. Money you don鈥檛 borrow in the first place is money you don鈥 have to pay back.
Make sure your budget is sufficient for the entire year, not just the next few months. You may only receive your funding a few times a year, so you may need to budget your funds over a period of time.
Limit your expenses
Rank your expenses and reduce the amount you spend on lower expenses.
- Share housing
- Buy used textbooks or rent textbooks
- Take public transit or car pool
- Explore ways to lower your cell phone bill
- Choose less expensive entertainment options
Estimate What you will Owe and Earn
- Use this site to estimate repayment plans.