Once you are approved for your student loan, it can be easy to look at the loan as free money. If you already need to pay for your classes, you might as well use any extra money to “help” you succeed in school, right? Wrong! Using student loan money for everyday spending can land you with insurmountable debt after graduation.
Many students see college as their chance to immerse themselves in education and fun. They rely on student loans to fund their living expenses, wants, and needs while they focus full-time on school. They think in future terms when it comes to their student loans. The assumption is that it will be easy to pay for student loans when you have a top-paying job. However, many students find themselves with low-paying jobs after graduation, and too much debt.
Why Students Shouldn’t Borrow More Than They Need
Student loans are much different than regular consumer credit. For one, there is no escaping student loans in financial hard times, especially since student loans will remain attached to you even after you file bankruptcy. If you do not pay your student loan debt, serious consequences can occur, such as getting your wages garnished, being sued, and losing out on tax refunds and federal benefits. Ultimately, you can also damage your credit if you do not keep up with student loan payments.
Student loans are not like low interest credit cards, and they should not be treated in the same way. Student loans are riskier and should only be used for school essentials.
How to Pay for Secondary Costs
The goal is to graduate with as little student debt as possible. However, you still have to live somewhere and eat, so how do you afford those costs? Here are some tips.
- Cut Your Costs: You may want to live the life while going to college, but it is much better to live like a poor college student. Live with your parents or several roommates if you have to. If you live on campus, forgo a car and car insurance. Skip the pricy student meal plan and make your own simple meals.
- Find Work: There are many part-time positions on campus, as well as off campus. Many businesses prefer to hire college students for odd hours or seasonal hours. Don’t be afraid to ask a college counselor for assistance for finding a work-study program.
- Earn Creatively: Just because you cannot find a paying position does not mean you are out of luck for money. There are many side jobs you can do and offer to your fellow classmates. Try earning a little side money from tutoring, editing papers, or even cleaning the sorority and fraternity houses. Why not offer your skills of cooking or flyer making?
In the end, you want your student loan to cover your educational expenses, but don’t consider everything, like spring break vacation costs, an educational expense. Live like a poor college student now so that you don’t have to live like one after you graduate.