3 Important Financial Considerations for College Students


The U.S. Department of Treasury recently released a report entitled “Opportunities to Improve the Financial Capability and Financial Well-being of Postsecondary Students.”  I read this report because I am an intern in the office of Federal Student Aid at the Department of Education, and I am working on various projects related to financial literacy for college students. I actually found this report to be a worthwhile read as a college student embarking on the daunting journey of funding my college education and managing my money while in school.

Despite the heavy financial burden, most of us understand the necessity of a college degree. Report after report make evident that education is one of the most significant factors in upward economic mobility. Still, college students face not only education loans but also consumer debt. There are so many important decisions that college students have to make in support of the ultimate goal to become financially independent. And, as tuition, books, housing and more only rise, the dream of financial independence has only become more difficult, and stressful.

Although I am no expert in financial literacy and financial aid, learning about responsible borrowing, careful budgeting, and repaying loans on time has helped lower my financial stress. The following are some simple tips I’ve learned that can alleviate financial stress and help college students manage their money.

1. Borrow responsibly. 

Federal Student Aid offers resources to help students understand the borrowing process. 

First, know how to read the financial aid package your school offers you. Be sure you can differentiate among grants, loans, scholarships, and work-study offers. You can do this by talking to the staff at your school’s financial aid office. Next, talk to your parents or those contributing to your education. Review the financial aid offer from your school, and look at your family’s finances, to decide which aid to accept or turn down. This is important in calculating how much you need to borrow in order to afford your education. You do not need to accept the full amount of loan money that’s offered to you; and understanding that concept will leave you with less debt in the future.

2. Budget carefully.

Budgeting is vital to lowering stress. By adopting responsible budgeting habits, you’ll learn planning skills to help manage multiple priorities and prepare for the future. Healthy budgeting practices provide dual opportunities for money-saving and time-management techniques. Budgeting is a great financial foundation and can be a stepping-stone to handling greater financial responsibility, leaving lifelong benefits.

3. Repay on time.

Repayment is the final step of the student loan process and lasts long after you graduate. If you do your research, the repayment process can go a lot more smoothly.

One way to reduce your stress is to understand the different repayment plans. You might find that you meet the criteria for making payments based on your income. Use the Repayment Estimator to help you understand the different repayment plans and decide which one is best for you. Then contact your loan servicer to see how to apply for the plan that best fits your situation.

Another thing to be aware of is that there are certain loan forgiveness options, including one for those who work full-time in public service. Knowing who qualifies and how to apply can ease the stress you feel about your debt as well.

Lastly, know that forbearance and deferment (ways to postpone or reduce your payments) are options if special circumstances arise. Understanding what’s best for your situation and applying in a timely manner is something you need to be aware of and talk to your servicer about.

As the report says, “Postsecondary education is essential to the economic health of our nation and to the economic opportunity of many Americans,” and each of our personal financial decisions contributes to that!

Megan McCusker is a sophomore at Loyola University Maryland studying History and Spanish. She served an intern for U.S. Department of Education’s Office of Federal Student Aid.

5 Things You Need To Know About Your Student Loans

info-person at computerIf you’re anything like me, you probably neglected to read all the fine print when you first took out your student loans. Now it’s time to start repaying them, and you have no idea where to begin…

Lucky for people like us, many federal student loans have a grace period, which is a set period of time after you graduate, leave school, or drop below half-time enrollment before you must begin repaying your student loans. The grace period gives you time to get financially settled and to select your repayment plan. For those of you who have graduated within the last six months, chances are that time is almost up.

So to get you started, here are five things you should know about your student loans:

  1. Loan Types

You may have federal loans, private loans, state loans, loans from your school, or some combination. Different loan types can have very different terms and conditions, so be sure you know what types of loans you’ve got.

To see all of your federal student loan information in one place, you can visit www.nslds.ed.gov. Once you log in, you can access a list of your federal student loans, including the loan type and information for your loan servicer.  A loan servicer is the company that will handle the billing and payments on your federal student loans.

For all other types of loans, consult your records. If you have questions about the type of a loan, you can try contacting the financial aid office at the school you were attending when you took out the loan.

  1. Loan Balance

Once you’ve tracked down all of your loans, you’ll want to find out what your total loan balance is. This will help you determine a plan for repayment.

For your federal student loans, www.nslds.ed.gov will display your loan balance. For private and other student loans, you’ll want to check with your lender.

  1. Loan Interest

Remember, a student loan is just like any other loan—it’s borrowed money that will have to be repaid with interest. As interest accrues, it may be added to the total balance of your loan if left unpaid. As a recent graduate, you may want to consider making student loan interest payments during your grace period to save money on the total cost of your loan.

  1. Repayment Options

Depending on the types of loans you have, you will have different repayment options.

Federal student loans offer great benefits, including flexible repayment options. Some options include tying your monthly payment to your income, extending your payments over a longer period of time, or combining multiple loans into one.

Want to compare what your monthly payment would be under each of our repayment plans? Try our Repayment Estimator! Once you figure out which repayment option is right for you, contact your loan servicer to enroll in that plan.

For non-federal loans, you’ll want to check with your lender to see what types of repayment options are offered.

  1. Repayment Terms and Benefits

Familiarize yourself with the repayment terms of all your loans. Here are some things to keep an eye out for:

Ok, that’s a lot to take in, but hey, if you could survive the final exams, the all-nighters and even a crazy roommate or two, figuring out a plan for repaying your student loans should be a walk in the park. If any point you have questions or need advice, don’t hesitate to contact your loan servicer. That’s what they’re there for.

Nicole Callahan is a new media analyst at the Department of Education’s office of Federal Student Aid.

Last Chance to Test Personal Finance Knowledge in Annual Challenge

Cross-posted from the Department of the Treasury

Tens of thousands of high school students from across the country have already tested their knowledge about personal finance through the National Financial Capability Challenge.  And this is the final week to take part!  The voluntary online exam is available to students through this Friday, April 13.

Piggy BankHere’s how it works:

Educators can sign up for free at challenge.treas.gov to administer the Challenge to their students.  It is a fun, free, and unique opportunity to help prepare our nation’s students for financial independence.

  • It’s quick.  It takes only about 30 minutes to administer the Challenge online, but the lessons our students will learn in preparing will last a lifetime.
  • It’s easy.  Comprehensive lesson plans and sample questions are available in the online Educator Toolkit to help prepare students for the Challenge.
  • It’s rewarding.  Educators and top-scoring students in each school will earnpersonalized award certificates.  States with the highest participation will also be recognized.
  • Any high school educator can do it.  Even if you’re not a math or personal finance educator, all educators of high school-aged children are encouraged to participate.

The annual Challenge, administered in conjunction with the Department of Education, enhances students’ financial capability by strengthening their understanding of saving, budgeting, and investing, among other central personal financial concepts.  From saving for college to managing expenses like cell phones, the Challenge helps students learn about a wide array of topics that together constitute a basic understanding of personal finance.  To learn more about the Challenge or to register for this year, educators should visit Challenge.Treas.gov.​

Melissa Koide is Deputy Assistant Secretary of the Treasury for Financial Access, Financial Education, and Consumer Protection.

ED Celebrates National Financial Literacy Month

Financial literacy plays an important role in promoting the financial health and stability of individuals, families, and our national economy. The economic crisis has highlighted how essential it is to have information, education, and tools to help people make informed financial decisions.

Piggy BankIn honor of National Financial Literacy Month, experts from federal and state agencies and nonprofit, educational, and private sector organizations will be providing valuable resources to help Americans improve understanding of their personal finances throughout the month of April.

In support of this effort, The U.S. Department of Education’s office of Federal Student Aid plans to provide daily financial management advice for students and borrowers on Twitter. Over the course of April, you can follow @FAFSA  for information and resources on being financially savvy at all stages of your education.

Here are some topics we’ll discuss:


    • Types of financial aid
    • Comparing financial aid packages


    • Completing the FAFSA
    • IRS Data Retrieval Tool


    • Maintaining your financial aid
    • Keeping track of your student loans


    • Know what you owe
    • Flexible repayment options

We will close out the month by hosting our April edition of #AskFAFSA Office Hours which will focus on financial literacy topics.

We encourage you to join the conversation. Starting now, if you have advice or tips for ways students and borrowers can be smart about their finances, share them with us using the hashtag #dollarsense. We look forward to hearing from you!

Elizabeth Coogan is the Senior Advisor for Financial Literacy at Federal Student Aid