• Home
  • GET THE BOOK
  • Start Here
  • Blog
  • Free Resources
  • Shop TBM
  • Courses

The Budget Mom

Real Women. Real Life. Real Finance

  • Home
  • Products
    • Live Rich Planner
    • Budget By Paycheck
  • Blog
  • FREE RESOURCES
  • COURSES
  • GET THE BOOK
  • Shop TBM

A life you love on a budget you can afford.

Here on TBM®, I provide you with simple, easy-to-follow solutions to help you budget your money, pay off debt, save more, and crush your financial goals. But more than that, I give you the tools to start doing the things that matter most to you, on a budget that actually works!

The Basics of College Loans

July 15, 2021
DEBT & CREDIT

Share
Pin61
Share
Tweet
Email
61 Shares

Did you experience sticker shock the first time you realized how much it costs to earn your degree? If so, then you’re not alone. 

If you choose to attend a public university, you can expect to pay around $10,560 per year. If you’re considering attending a private college, the costs could run as high as $37,650 per year. 

Of course, these costs can vary depending on a variety of factors, including your major and whether you’re an in-state or out-of-state resident. But even on the lower end of the spectrum, the total cost of attendance can quickly add up.

This is why a large percentage of college students will end up taking out a combination of federal and private student loans.

Featured Post

Saving For Your Child's Future

Read Post

Federal Loans vs. Private Loans

If you’ve sought any advice on applying for loans, you probably heard that you should apply for federal loans first. That’s because federal loans are funded by the federal government and come with lower interest rates.

Federal loans also come with certain borrower protections that private student loan borrowers do not always receive. For instance, due to the pandemic, there is currently a freeze on federal student loan payments until Sept. 30, 2021. 

The interest rate is also set at 0%, so you aren’t penalized for failing to make payments on your loans. While some private lenders have offered forbearance for up to 90 days, private loans don’t come with the same type of flexibility.

That’s because private loans are distributed by private lenders, like banks or online lenders. The lender sets the terms and conditions of these loans, and a credit check is required. 

Private student loans are more expensive than federal loans, which is why they should always be your last resort. But if you still have gaps in your tuition after receiving federal aid and federal loans, then private loans can be a good option. 

Featured Post

Should You Consolidate Your Student Loans?

Read Post

The Different Types of Federal Loans

When you apply for federal loans, you don’t have to worry about undergoing a credit check or finding a cosigner. If you’ve graduated from high school and are planning to attend college, you’re automatically eligible to receive federal loans. 

However, there are different types of federal loans you can receive as an undergraduate. And the two main types you want to familiarize yourself with are subsidized and unsubsidized loans. 

Direct Subsidized Loans

If you're an undergraduate student with financial need, you may qualify for direct subsidized loans. The main advantage to receiving subsidized loans is that the government pays the interest while you're still in school. The government determines how much you can receive in subsidized loans each year. 

Direct Unsubsidized Loans

Anyone can take out unsubsidized loans, whether you have a financial need or not. With this type of loan, you’re responsible for any interest that accrues on the loan. This can add up to thousands of dollars over the life of the loan.  

How to Apply for Student Loans

Now that you understand the different types of loans you can take out, it’s time to begin the application process. And you’ll want to start this process as early as possible since federal loans are given on a first-come, first-serve basis. 

Applying for student loans can feel pretty overwhelming, so I’ve broken this down into three simple steps: 

1. Fill Out the FAFSA

Your first step is to fill out the Free Application for Federal Student Aid (FAFSA). If you don’t fill out the FAFSA, you won’t be eligible to receive federal loans or aid. 

To start, you’ll create your FAFSA account and choose your username and password. You’ll need at least an email address and your Social Security Number to set up the account. 

The information you need to fill out the FAFSA is pretty extensive. You’ll need to provide your personal information and your tax returns (or your parents’ tax returns if you’re a dependent student).

You’ll also include information about any colleges you are considering attending. Don’t worry about whether or not that school has accepted you — if you’re considering attending, add it to the list. You can list up to 10 different schools on your FAFSA, and the colleges you chose will receive your FAFSA electronically.  

2. Review Your Student Aid Report (SAR)

Once you’ve filled out the FAFSA, you’ll receive a Student Aid Report (SAR). The SAR is a summary of all the information you entered. You’ll want to check this report carefully to make sure everything is accurate.

At this point, the schools you included in your FAFSA may request additional information. It’s essential to provide this documentation as quickly as possible, so you don't miss out on any federal aid. 

3. Review Your Financial Aid Award Letter

And finally, you should receive a financial aid award letter from the schools listed on your FAFSA. This letter will let you know the types of aid you qualify for. For instance, if you qualify for a work-study program or federal grants, this will be listed on your financial aid award letter. 

It will also outline how much you qualify to receive in subsidized and unsubsidized student loans. You’re not required to accept the total amount offered to you in federal loans. 

Once you’ve received your financial aid award letter, you should have a better idea of how you can pay for college. From there, you can start to determine whether you have enough federal aid and loans to pay for school or if you need to consider private loans as well.

The Bottom Line

Earning your degree can be expensive, but there are plenty of options available to you. The best thing you can do is to start this process early to maximize your odds of receiving federal aid. 

And remember, while federal loans are less expensive than private loans, it’s still debt that you’re going to have to repay. So don’t take out more federal student loans than you need to pay for school. 

Featured Post

Saving for College – What is a 529 Plan?

Read Post
Share
Pin61
Share
Tweet
Email
61 Shares

Filed Under: Tagged With: COLLEGE, COLLEGE SAVINGS, PAYING FOR COLLEGE, STUDENT LOANS, TUITION

Previous article:
« How to Improve Your Self-Care Without Breaking the Bank
Next article:
Military Families: Budgeting for a PCS Move »

Hello, I'm Kumiko, but everyone just calls me Miko. Welcome to my blog, The Budget Mom. I am an Accredited Financial Counselor® , and mom to a rambunctious boy. Come along with me as I strive to live a life I love on a budget that I can afford. Read more about me.

RECENT YOUTUBE VIDEO

The Budget Mom

The Budget Mom
Today, I am showing you how I use visual financial trackers in my life. I have a lot of these trackers available in my Free Resource Library (https://bit.ly/2PDmTHz), in my TBM Shop (https://bit.ly/42S0DAi), or you can find them over at DebtFreeCharts.com.

CHAPTERS
00:00 Intro
00:37 Why you should use financial trackers
04:37 Savings Goals
08:32 Graphic Tracker for Debt
13:16 Lined Tracker for Debt
20:43 Tips & Recommendations

➡️ HOW I TRACK MY SPENDING: https://bit.ly/3aIe89I
➡️ HOW TO USE A BUDGET CALENDAR: https://bit.ly/2IzF2Vj
➡️ FINDING YOUR WHY: https://bit.ly/3aJUryj
➡️ THE BUDGET MOM'S FINANCIAL FREEDOM STEPS: https://bit.ly/3cfJXsp
➡️ HOW TO GET STARTED WITH THE CASH ENVELOPE METHOD: https://bit.ly/2vQJaO5
➡️ HOW TO CREATE A PLAN OF ATTACK TO PAY OFF DEBT: https://bit.ly/2wDETxF
➡️ HOW TO CLOSE OUT YOUR BUDGET: https://bit.ly/2Uz0UUW

ABOUT ME

Kumiko Love is a single mom who empowers women everywhere to regain control of their financial lives. An Accredited Financial Counselor with over nine years of experience in the finance industry, she founded The Budget Mom, a community of millions of women on a path to financial fulfillment.

She's also the creator of the wildly popular Live Rich Planner® and Budget by Paycheck® Workbook. Love has been featured on Good Morning America, the Today show, CNN, CBS, ABC and in USA Today, US News, World Report, Huffington Post, Money Magazine, Parents Magazine, the Washington Post, and Real Simple. She lives in Spokane Valley, Washington.

YOU CAN FIND ME AT:

📝 WEBSITE: https://www.thebudgetmom.com
📘 FACEBOOK: https://www.facebook.com/thebudgetmom/
📸 INSTAGRAM: https://www.instagram.com/thebudgetmom/
📌 PINTEREST: https://www.pinterest.com/thebudgetmom/

GET STARTED

➡️Start Here: https://www.thebudgetmom.com/start-here/
➡️Courses: https://courses.thebudgetmom.com/
➡️Free Resources: https://bit.ly/2PDmTHz
➡️GET 10% OFF my popular Budget-by-Paycheck Workbook - Coupon Code TBMYOUTUBE https://bit.ly/3FEdZFp

Soundstripe Music License Code: WIKRJYHFAEB3H6B3
Load More... Subscribe
Free Resource Library

Recent Posts

  • HELOC to Pay Off Debt: Is it a Lifeline or a Trap?
  • Budget Tune-Up: Know When to Adjust Your Limits
  • Freeze Your Credit: How It Works and When It’s a Smart Move
  • Bounce Back from Fraud: How to Protect Your Family’s Finances and Move Forward
  • Unlock Hidden Health Insurance Perks: Save Money and Boost Your Family’s Finances

Blog Categories

Amazon Associates Disclosure

The Budget Mom, LLC is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to amazon.com.

  • Cart
  • Shop Policies

Start With My Friday Newsletter

Every Friday I send you a short helpful email with my popular Friday freebie. Join my 500k+ subscribers!

About

  • Home
  • ABOUT TBM
  • Contact
  • Start Here

Important

  • DISCLAIMER
  • PRIVACY POLICY
  • Subscribe

Favorites

  • YouTube
  • Blog
  • Live Rich Planner
  • Budget by Paycheck

Start With My Friday Newsletter

Copyright ©2023, The Budget Mom®
This website contains affiliate links, which means that if you click on a product link, I may receive a commission. This website is a participant in the amazon services llc associates program, an affiliate advertising program where I earn advertising fees by linking to amazon.com.
  • How financially fulfilled are you? Take this 2 minute quiz to get your score!
    Click Here to Start