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Financial Aid Relationship Right For You

Financial Aid Relationship Right For You

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The Financial Aid Relationship That's Right For You

Linking up with the right financial aid contributor is fundamental in financing your educational ambition. Your ultimate goal is to earn your degree, but don't sabotage your goal by graduating with more debt»» than you can handle. Too much college debt won't be a smart start in your post-grad school career.

Most graduating students will borrow money to pay for some or even possibly all of their college educational costs. While college is worth every single dime, it's an expensive investment. No one (most people do not)have tens of thousands of dollars just waiting to be handed over to them for the purpose of career ambition. However, this doesn't have to mean that you'll graduate with an unbearable debt burden. It also doesn't mean that your first career position will be made basiced primarily to satisfy your loan payments. Careful selection and wise borrowing decisions can keep those situations from developing.

Just as you would consider which college will be the best choice for you, you also must gather information and decide how best to finance your education.


Your education is an investment in yourself»», requiring both time and money. You are spending your limited resources now to harvest a positive return on your investment in the future. You should borrow the minimum amount of financial aid that is necessary to fulfill your educational goals. This will maximize the net return on your investment and help you obtain your financial and career goals from the beginning.

How Much Should You Borrow?

Take organized steps to determine how much you need to borrow. The total dollar amount you should borrow will depend on the following factors:

  • Cost of attendance
  • Loan limits established by the federal government / lenders
  • Your existing financial commitments, such as car loans, mortgages, utility & life necessities bills
  • Additional resources such as savings accounts
  • The amount of debt you can afford to repay once you graduate. NOTE: I've been told to base this amount on the highest possible total of financial aid that you can expect to owe. It make sense to over calculate than to under calculate.

Organized steps for the financial aid that's right for you.

By law, you can borrow up to the cost of attendance (as determined by your school). Other financial aid include:

  • Scholarships
  • Grants
  • Work-study.

Cost of attendance typically includes tuition, books, fees, room and board (if on campus), and possibly other miscellaneous living expenses.
While you may need to borrow as much as your college allows, remember, it's best to borrow the minimum amount possible in order to limit your overall financial interest fee obligations later. If you find that you need more than the school has allotted, you have the right to appeal the decision as long as you do not exceed the maximum amount as established by federal regulations.

Borrowing limits on student loans.

The federal government places annual and aggregate borrowing»» limits on federal student loans. Check the terms of each loan you want to employ for the annual and aggregate loan limits. Carefully and truthfully review your current financial status, inward income (if any while in college) and any financial commitments you've made prior to entering college. Factor in consumer debt, such as:

  • Auto loans
  • Credit cards
  • Housing expenses

Understand the repayment obligations of each financial loan you are interested in. You will be responsible for these prior commitments in addition to any education debt you accept. Your education loans are not meant to and will not cover these prior commitments.

Research the job market you will be entering after graduation. Consider a realistic determination of your future income. It's best to under estimate than to over estimate your entry level or career advancement»» salary.

Will you be able to manage your monthly payments, considering your likely starting salary?

NOTE: When choosing a loan program, be sure to investigate loans that offer alternative repayment plans that can help you manage your payments, especially early on in your career.

Step 1: Calculate the Amount of Assistance Needed

Keep in mind, your school will calculate the cost of attendance only for the in-school period, which is not normally a full 12 months. You will need to reflect on how you will cover your expenses when you are not enrolled in classes.

Step 2: Estimate the total amount in student loans and how much your monthly payments will be after graduation

To more accurately estimate your total in student loans (after graduation), multiply the total amount of financial assistance you want to barrow by the number of years you expect to be in school. Don't forget to add the accrued interest, which may significantly increase the total you'll have to repay. Be sure you understand and can afford how much your monthly payment will be.

Step 3: After graduation

Your budget, after graduation will most likely include the same ingredients as your budget did while in college, minus the education attendance expenses. However, you may have new expenses related to your job. Make sure to add this expense with your student loan monthly payments.

Step 4: Evaluate the obtained goal and your future life

If you have done your pre college homework, you can estimate what your beginning salary may be. Subtract your future expenses and projected monthly student loan payment from your anticipated future monthly income.

  • If you have spare income, it means that you can afford to borrow the amount you had planned.
  • If you have a zero balance, it may mean that you have just enough to cover your future expenses.
  • If you have a negative balance, you will need to re-examine the amount you plan to borrow.

If you have a negative balance, you may be able to reduce your expenses while in school, or find additional non-loan resources to pay for these expenses in order to reduce the amount you must borrow. While in college you may want to work a minimum amount of part time hours from home to supplement your income»» during or after college.

Student loans»» can be a valuable investment, but they are an obligation. Don't start your new career (or career advancement) with a debt that can hurt your credit standing. Many industries are now using personal credit scores as part of the application process. In order to ensure a positive college experience and a successful return on your investment approach financial aid borrowing carefully, thoughtfully, and be realistic in your budget and salary projections.


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