At Credit Abuse Resistance Education (CARE), we are committed to helping students like you get the knowledge you need to make smart financial decisions. We believe learning financial management skills will help you reach your personal and professional goals. With the number of students dependent on student loans steadily increasing each school year, our volunteers across the country talk with young people every week to help students learn more about loans, how they work, and how to handle their care.

Here our CARE’s top five tips regarding student loans:

1. Complete the Free Application for Federal Student Aid (FAFSA) every year. In 2018, $2.6 billion in federal Pell Grant money went unused. Maximizing grants should be the first thing you do before you look to borrow money.

1. Only use student loans to pay for the absolute necessities. “Live like a student during college so you don’t have to after graduation” is more than just a motto. Borrow only what you need to cover the cost of both direct and indirect college expenses or you will be paying more in the long run for luxury items.

1. Apply for federal student loans before considering private student loans. Federal loans have low fees, low fixed interest rates, and several repayment plans.  Private loans often have higher fees and short triggers for default.

1. Make sure you understand the fine print. Before you sign any document make sure you understand the terms of the agreement. What are your repayment options? Do you have to pay interest right away? Does the interest rate change over time?  Be sure to ask questions about anything you do not understand.

5. When you graduate, the total amount you borrowed should not be more than the salary you expect to earn during your first year of work. To find out what your salary projections might be, check out the 2019 College Salary Report from Payscale or visit the career center on campus.

Want to know more about student loans and how to build a strong financial future? Invite a CARE volunteer to speak at your school.  We give financial literacy presentations in classrooms as well as in partnership with sororities, fraternities, and other groups.  Reach out to us to learn more.

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