Know what you owe
Financial Literacy Month: Week 2
An important money tip for college students is to know what you owe, who you owe it to, and what options and responsibilities you have.
Did you know you can monitor your total amount of student loans borrowed? To find information about your federal student loans, go to the National Student Loan Data System (NSLDS) website.
NSLDS tracks your federal loans. It shows the amount you borrowed and the lender/servicer for each loan. Not sure how to navigate NSLDS? Read this article about how to access your loans on NSLDS to learn more.
One great way to stay on top of your loans — even when you’re in school — is to set up an online account with your loan servicer(s). NSLDS can help you determine who services your loan(s). Go to the servicer/lender website and register for an account.
Did you know that interest accrues on certain types of loans while you’re in school, and the unpaid accrued interest is capitalized? Capitalization will increase the principal balance of your loan because the unpaid interest is added to it.
That means future interest will accrue on a higher balance, which is why paying what you can while you’re in school can be a smart money move. Also, by making interest payments while you’re in school, your payment will be lower when you enter repayment, and you may reduce your repayment obligations.
Monitoring your current loan balance and your expected future monthly payments might encourage you to borrow smartly. Reducing the amount you borrow typically results in a lower monthly payment. You can use loan calculators to see how your monthly payment and total cost will change on the different repayment plan options.
One possible way to reduce the amount you borrow for school is to seek funds that don’t need to be repaid. Scholarships may be available to you. You can visit the University of Phoenix Center for Scholarship Excellence to learn more, and read this article about scholarships, grants and loans for tips.
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