It's no secret that college is a big investment for students and their families. As college costs continue to rise, there's a lot of confusion and misinformation out there regarding financial aid and college funding, especially when it comes to student loans.
To help you borrow smarter, we're debunking some of the biggest myths about student loans.
Myth #1: You should borrow as much money as you can for college
Student loans are by far the most common way to borrow money for college. But even if you're eligible to borrow a significant amount of money in student loans, you're not required to accept the full amount. Finding ways to reduce your student loan borrowing can help you save thousands in the long term!
Before you borrow, use a student loan calculator to estimate your future monthly payments, as well as the amount you'll pay in interest over time. If you're worried about overborrowing, consider ways to reduce the amount you need in student loans. For example, you could apply for scholarships and grants, get a part-time job or choose a more affordable school.
If you end up borrowing more than you actually need for a semester, you can return unused federal student loans within 120 days of the disbursement. This way, you won't have to pay interest on it in the future.
If you choose private student loans to fill gaps in college funding, make sure the loan is certified through your school. This means the school verifies the amount you need to borrow, preventing you from borrowing too much or too little!
Myth #2: You can simply skip a student loan payment if you need to
As with any loan, if you face financial hardship and think you can't make your payments, contact your loan servicer right away. Skipping a payment without an arrangement in place can hurt your credit score, leading to long-term consequences.
Due to the coronavirus pandemic, the federal government is temporarily waiving interest and has suspended federal student loan payments through at least September 30, 2021. If you think you will have difficulty making payments when they resume, now is a good time to consider refinancing your student loans to make payments more manageable. Wright-Patt Credit Union (WPCU) can help you explore your options for refinancing your student loans into one easy-to-manage payment at a great low rate.
Myth #3: You don't have to pay off your student loans while you're still in school.
When you need to pay your student loans depends on the type of loans you have. With most federal student loans, you aren't required to make payments if you're still in school. Some federal loans even give you a six-month “grace period" after you graduate, leave school or drop below half-time enrollment. The grace period is designed to give you time to find a job and get your finances in order before making payments.
If your student loans aren't due yet, it could still be a good idea to start making payments as soon as you're able to. Even small payments can help cut down on the amount of interest you owe.
Do you have questions about student loans?
If you're still feeling confused about student loans or overwhelmed by payments, WPCU is here to help! Our student loan and college access counselors are available to discuss any questions you have about student loan funding and refinancing, completing your FAFSA and other financial aid concerns.
Ask a question or schedule a one-on-one appointment with a college access counselor. We're here to help over the phone or online!
P.S. If your family is still in the pre-college planning stages, WPCU is proud to offer our members free access to helpful tools, guides and resources through Edmit Plus. Check out this useful tool here and get started today!
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