Taking out student loans could be the first major financial decision of your life.

Since you could be paying back these loans over the next several years, it’s important to understand that your financial future depends on making smart borrowing decisions now. One of the easiest ways to minimize your student loan debt is to keep your overall cost of borrowing for college down. Here are some responsible borrowing tips for college tuition.

Start Your Scholarship Search and Fill Out the FAFSA®

Starting as early as your junior year, begin looking for scholarship opportunities. The more grants and scholarships you receive, the less you’ll need to pay back. Starting your scholarship search early can also free up time at the beginning of your senior year—to fill out the FAFSA (Free Application for Federal Student Aid). Not only can this unlock federal aid opportunities, it is also used by certain colleges for private aid, as well as grant and scholarship opportunities. If your school requires it, you may also need to fill out the CSS Profile®, which is an online application that awards aid from non-government sources.

Get Clear on Financial Expectations

The less you borrow, the less you’ll have to pay back. It seems obvious, but taking on too much debt is a common mistake. If your dream schools aren’t offering enough aid, you may need to make some hard decisions. You also might think about ways to minimize tuition. For example, some students start at community college to save money on core classes before transferring to a four-year school. Taking community college classes during the summer can help you graduate early, which also reduces your tuition bill. It can also be a good idea to have an honest conversation with your family about money and expectations, especially if your parents need to be loan cosigner. Finally, consider reaching out to alums and people in your network who have recently graduated college. They can give perspective on what it’s like trying to pay back student loans after graduation.

Know How Much You’ll Need to Borrow

Remember, the money you need for college isn’t just tuition alone. You’ll need to cover housing, dining, travel and commuting, textbooks and supplies, as well. Prior to your freshman year, set a budget and make sure to leave a little room for fun and incidentals. If you have friends or contacts at your school, talk to them about the actual costs they incurred their freshman year and ask about any unexpected expenses that popped up for them. Take the total costs you calculate, subtract what you have saved for college as well as any free financial aid like scholarships or grants to find out how much you may need to borrow in student loans.

Understand Student Loan Options

Once you receive your award letters, it’s time to compare packages and offers. Remember: Grants and scholarships don’t need to be paid back, but loans do. You also might have federal work-study options, which can be helpful in paying ongoing college expenses, like food and housing. If you completed the FAFSA then you may have subsidized and unsubsidized federal student loan options as part of your financial aid award package. These are made by the federal government and have fixed interest rates. A subsidized loan means that you will not be responsible for the interest that accrues on the loan while you are in school. This is a great way to keep your cost of borrowing down.

But your financial aid package may not be extensive enough. In this case, private student loans might be an option for you and your family. Private student loans are made by private banks and lenders. They often give you the choice between a fixed or variable interest rate and require a credit check. Compare your student loan options and choose the loans that make the most sense for your family. Keep in mind you may need your parents to cosign a private student loan.

Choose Your Interest Rate

Federal student loans have fixed rates, but if you decide to take a private student loan, you may have the choice of a fixed or variable interest rate. One tip for taking out student loans is to compare interest rates. With a fixed rate loan, the interest rate remains the same for the life of the loan. This provides a sense of stability since you will know how much your payment will be each month. A variable rate loan is based on a benchmark interest index and will change periodically. This means the rate and monthly payment could increase and decrease over the life of the loan.

Check for Fees

Some student loans come with fees. The most common type of student loan fee is the origination fee that federal loans charge, which is a percentage of the loan amount and it is deducted from your disbursements. You should also check for application fees, late fees, and any other type of fee since these could add to the cost of your loan.

Look for Discounts and Benefits

Many student loans offer an interest-rate discount—often 0.25%—when you sign up for automatic payments during repayment. This can help you save some money on the cost of your loan.

Consider Making In-School Payments

Many student loans have the option of deferring payments until after graduation if you are enrolled at least half-time. This is a convenient feature for college students since many don’t have a job, but waiting to make loan payments until after you graduate usually means you end up paying more in interest. One way to pay off student loan debt faster is to consider making in-school payments even if they aren’t required. You can also look into a student loan that requires a small monthly payment while you’re in school. These loans can have required payments as little as $25 a month and can sometimes have a lower rate.

If in-school deferment works better for you, making lump-sum payments or even small payments each month while you’re in school can help you save money over the life of your loan and can be a smart strategy for paying off student loan debt. For example, if you have a $10,000 loan with a 6% interest rate and you make $25 payments during school and your grace period (assuming 50 payments total), you can save $648. That savings increases to $1,297 if you up your payment to $50. So if you have a little extra cash, consider using it toward paying down your student loans while you’re in school.

Borrowing for college is a big financial responsibility that requires some planning and research, as well as taking advantage of student loan tips that can help you make the best student loan decision for you. Remember, you’re not alone. Talk with your family, your school’s financial aid office, and other students. Take advantage of any financial aid workshops. And know you may need to shift some of your plans to come up with a strategy that makes sense for your education now—and your wallet later.

FAFSA® is a registered trademark of the US Department of Education and is not affiliated with Discover Student Loans.

CSS Profile® is a trademark registered by the College Board, which is not affiliated with, and does not endorse, this site.

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