Smart borrowing means making informed decisions about when and how to take on debt. It involves evaluating the necessity of the loan, understanding the terms and conditions, and ensuring that you can comfortably meet repayment obligations. Key strategies include borrowing only what you need, comparing loan options to find the best rates, and planning for repayment within your budget. Smart borrowing allows you to manage debt responsibly, avoid unnecessary interest payments, and maintain a healthy credit score.
Determine Your Cost
Your Financial Aid Offer shows the costs you have to pay to the University, including tuition and fees, and housing and food if you live on campus. There are also expenses outside of billed costs that you'll want to consider, such as textbooks, personal expenses, travel, and rent, groceries, and utilities if you live off campus.
Federal Loans
Federal loans are offered to all students who file the FAFSA. For undergraduate students, Stafford loan amounts are based on year in school and typically have a lower interest rate than private loans. Graduate students are offered Stafford and PLUS loans up to their maximum cost of attendance. You do not have to accept the full loan amount–you should only borrow what you need, as you will have to pay these loans back with interest after graduation.
Private Student Loans
If federal loans are not enough to cover your expenses, you may consider a private loan. Private student loans typically require a co-signer and tend to have higher interest rates than federal loans, so only borrow what you need for your U-Bill and/or living expenses. Private loan counseling is required for all undergraduate students. During loan counseling, a financial aid advisor will help you make a budget and discuss future borrowing and repayment options.
Loan Refund
A loan refund is money left over from your loan after the U-Bill has been paid. This refund is often used for books, school supplies, and/or off campus living expenses. You should budget carefully for your loan refund and only take what you need. You will have to pay back all loans with interest after your graduate.
Plan For Loan Repayment
Make sure you know who your federal loan servicer is–the company you will make payments to. If you have private loans, you will make payments directly to the lender. You will complete loan exit counseling before graduating to learn more about federal loan prepayment. If you have questions about loan repayment, you can contact your loan servicer or the Office of Student Financial Aid.