Our fourth blog for National Financial Literacy Month is all about the confusing world of student loans. Read on for some helpful information and tips for managing your debt once you graduate!
Loan Literacy 101
Understanding student loans can be a very challenging task. With so many different types of loans, interest rates, grace periods, and other miscellaneous loan information, it is completely understandable to feel overwhelmed by your student loans. However, student loans do not need to be scary or intimidating! In this blog, we will give you a quick overview of the most common federal loans that Brandeis students receive and we will help you start planning your debt payment so that you are not caught off guard after graduation.
Common Loans
Loan Literacy 101
Understanding student loans can be a very challenging task. With so many different types of loans, interest rates, grace periods, and other miscellaneous loan information, it is completely understandable to feel overwhelmed by your student loans. However, student loans do not need to be scary or intimidating! In this blog, we will give you a quick overview of the most common federal loans that Brandeis students receive and we will help you start planning your debt payment so that you are not caught off guard after graduation.
Common Loans
Federal Subsidized Stafford Loan
Does NOT accrue interest while student is in school
Fixed interest rate of 3.4% (2012-13 academic year and subject to change every year)
Grace period: 6 months
Federal Unsubsidized Stafford Loan
Accrues interest while student is in school
Fixed interest rate of 6.8%
Grace period: 6 months
Federal Perkins Loan
Interest: Does NOT accrue interest while student is in school
Interest rate: Fixed interest rate of 5%
Grace period: 9 months
Debt Payment Planning
Loan FAQs
- You are required to complete entrance counseling at the beginning of your undergraduate career and sign the Master Promissory Note. Likewise, you are required to complete exit counseling at the end of your undergraduate career.
- Monthly payments are determined by each specific loan holder.
- Most private loan interest rates are determined by your credit score.
- Depending on your situation, you may wish to consolidate your loans. If you are interested in learning more about loan consolidation, check out this pros and cons list!
Student Loan Calculator
We have found a student loan calculator from higherone.com that is a great resource to estimate your monthly student loan payments. Although this is only an estimate that will give you an idea of what your monthly payment might be one you have completed your schooling, it can be a great planning tool. For example, you can use this tool to make sure that your monthly payments are "less than 10 percent of your monthly salary in order to comfortably afford them" (HigherOne).
When you take the time to learn about your student loans, your future payments do not seem as daunting or scary as you may have previously believed. With proper planning and access to information, we can all have a better grasp on our personal finances. This is why Savvy Student so adamantly celebrates National Financial Literacy Month. We want YOU to be responsible for your own finances so that you can have a stress-free life after graduation.
Stay calm and collected!
~Savvy Student
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