Earning a college degree is a goal for many high school students, but with rising tuition, it’s important to have another goal alongside this one – a strategy on how to pay for college now and after you’ve graduated if needed. When it comes to financing your higher education, there are several ways to make college more affordable. In this blog, we will discuss student loans and offer tips on how to manage your college debt.
How Can Recent Graduates Determine the Most Affordable College Option?
No matter if you’re a recent high school graduate or an adult who wants to start your college education, there are a few things to know. The cost of college continues to rise, especially in today’s economy, and when you consider the combined cost of tuition, fees, housing, food, books and supplies, it can become expensive.
Creating a plan on how you will pay for college can put you in a better financial position and give you peace of mind that you’ve done your homework. A great place to start is by applying for federal aid by completing the Free Application for Federal Student Aid (FAFSA). The FAFSA works with your preferred universities and colleges to produce a financial aid package for you upon acceptance. The aid package will detail how you can pay for college expenses through grants, scholarships, work-study programs and loans.
If you want to see how expensive it is to attend any college, you can view the college cost calculator on the StudentAid.gov website. By using the Department of Education’s College Scorecard calculator, you can see if a school’s cost is low, medium or high compared to the rest. This tool will help you pinpoint affordable colleges so you can narrow your choices and know how much money you need from savings and student loans.
How Can Graduates Effectively Manage and Pay Off Large Student Debts?
After college, you may have some student loan debt. Once you’ve graduated, there’s typically a six-month grace period before payments begin to let you get settled into post-academic life and find a job. Even with steady employment, however, those student loans could seem a overwhelming. Here are a few tips on how to pay off your debt faster.
- Make Payments Right Away: If you are given a grace period before you have your first payment, consider paying during this time even though it’s not required. Reducing the principal amount as much as you can lets you pay less interest over time.
- Set Up Automatic Payments: The easiest way to never miss a payment is to set up automatic payments on your loan. This keeps your loan current and avoids any late fees. According to StudentAid.gov, you may even get an interest rate deduction for setting them up.
- Pay More Than the Minimum: Paying more than the minimum amount due each month lets you reduce the principal amount owed, which can help you pay off the loan faster. Also, you save money on interest by making larger payments.
- Use Your Tax Refund: A prudent way to reduce the principal amount owed is by making additional payments when you have the extra money. For example, you can use your tax refund to help pay down your debt.
Other ways to reduce your student loan debt are to earn additional income via part-time jobs and to reduce the amount of discretionary spending each month so you can pay more. It may take time, but paying off this debt will give you greater peace of mind, reduce your stress and improve your overall financial wellness, including your credit score.
How Is Gen Z Approaching Student Loan Debt Differently?
On average, Gen Z borrowers owe just under $25,000, according to 2023 data from Bankrate.com. This generation is using trends and information found on social media and the internet to help themselves pay down their debt.
Some of the creative ways Gen Z are paying back their loans include earning money online by user-testing websites and apps, editing YouTube videos and using TikTok Live to collect virtual gifts that can later be redeemed for real money.
Some of the generations have created group chats or are using the “loud budgeting” technique, which is to simply decline social opportunities to save money and then share why publicly.
Using such techniques, Gen Z is also gaining the financial confidence and awareness about money that will help them throughout their lives.
How Can Travis Credit Union Assist in Managing Student Loans?
Travis Credit Union is focused on your financial wellness, including offering ways to pay for college. TCU has partnered with Sallie Mae for student loans while our free online Knowledge Base provides a variety of courses to help you save and borrow better when it comes to financing not just your higher education but other parts of your life, as well. The credit union also offers a $2,000 Community Impact Scholarship for higher school seniors who are TCU members.
For college graduates starting their first full-time jobs, TCU has products, such as our Free Checking and Access Checking accounts, that can help you manage your money better, especially if you use free direct deposit. Plus, our top-rated mobile app means you can do your banking on-the-go, wherever you are. Visit traviscu.org to learn more about what TCU can do for you.