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

When you first head to school, you will likely want to focus on your studies and making the most of life at college, so thinking about your repayment plan is often put off until after graduation, unless you selected a student loan with required in-school payments. The sooner you start planning, the better you’ll protect your financial future. After all, you could be paying back these loans over the next several years. The first step to a solid repayment plan is keeping the cost of borrowing for college down. Here’s how to do it.

Borrow Only What You Need

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. NerdWallet found that 48 percent of students say they could have borrowed less. To avoid this, you’ll need to carefully budget your expected college costs. Prior to your freshman year, set a budget based on tuition, housing, dining, travel, textbooks and supplies. 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

If you completed the Free Application for Federal Student Aid (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, which is a great way to keep your cost of borrowing down.

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 you.

Choose Your Interest Rate

Federal student loans have fixed rates, but if you decide to take a private student loan, you may have interest rate options. 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 either the Prime Index or the London Interbank Offered Rate (LIBOR) and will change when the index changes. This means the rate and monthly payment could increase and decrease over the life of the loan. These loans tend to offer a lower initial starting rate than fixed rate loans, which can be a good option if you know you will pay it off quickly.

Check for Fees

Some student loans also come with fees. The most common type of student loan fee is the origination fee, which is a percentage of the loan amount and deducted from your disbursements. You should also look 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. Additionally, some student loans will have benefits such as cash rewards for getting good grades. These types of benefits won’t reduce the cost of your loan, but you could use the cash to pay for other college expenses.

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. To help reduce the amount you pay in interest, you can 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. For example, if you have a $10,000 loan with a 6 percent 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. Doing the work now will help you make an informed borrowing decision, which will pay off in the long run. Even if you need to borrow, you should still look for ways to reduce the amount you take out. Continuing to search for scholarships — even after you start college — can help offset your borrowing.