Avoid Overborrowing Student Loans
Student loans can be a vital part of a student's financial plan for college, however it is important to take steps to avoid overborrowing. Only borrow what you need to pay for your education-related expenses and live like a student now, so you don't have to later.
- Federal loans are typically offered to you at the maximum levels and may be more than what you need to cover your direct costs.
- Consider alternatives before accepting loans.
- Loans will accrue interest.
- The more you borrow now, the greater your monthly loan payment will be when you leave school. Estimate your future monthly student loan payment by using the Federal Student Aid Repayment Calculator.
- There are lifetime (or aggregate) limits for various aid programs including Federal loans. You will reach these limits quickly if you borrow the full amount of your loans each year, and could run out of eligibility before earning your degree. This is especially important if you are a part-time student.
Tools
MyMoney.gov offers free information for financial planning through various life events including many resources, calculators, budgeting worksheets, and helpful checklists.
Estimate your future monthly student loan payment by using the Federal Student Aid Repayment Calculator. Remember to consider what other expenses you will have as you begin your first job.