Student loans are a huge undertaking and major financial commitment. You want to make sure that you have a plan in place for managing your loans while still in school. You don’t want to feel overwhelmed with what you have to deal with on top of trying to find a job along with the rest of life’s challenges. Here are a few things you can do to make your transition period a little easier.
You do have the option to defer your loan payments while in school. Chances are, if you are going back to get your graduate degree, you already have some loans to deal with for your undergrad degree. Payments on student loans can often be put into deferment while you are in school or in some cases even during internships. Interest continues to accrue during this period in most cases, so take that into consideration when making the decision to defer.
The opportunity to put off your payments may be enticing, one less thing to deal with while you are busy focusing all your energy on school, but it is always best to pay whatever you can. If you do choose to continue your normal payments, you will have the opportunity to pay off your loans in total that much faster. If you choose to defer your payments, you can still pay little bits, while you have a zero balance due. Every penny you can put towards repayment is money you won’t have to pay later, and a balance that will not gain interest.
If you are taking out additional loans for graduate school, you want to resist the temptation to borrow more than you absolutely need. Try to pay for whatever you can on your own and only borrow exactly what you can not cover on your own. Remind yourself when you are applying for loans that this is not “free money” and all of it will need to be paid back with interest after completing the program. What seems like a great idea now could not look so great in a few years.
When you get your tax refund at the end of the year, resist the urge to spend it on those shiny new things or lavish vacations. The best thing you can do is forward that tax refund directly towards a student loan pre-payment. If you can make yourself pay the whole chunk of money towards your loans, you will get ahead and not only owe less now but also save on potential interest costs later.
There is a reason that there is the phrase “the starving student.” When you are in school, you need to try and live as frugally as possible. This means borrowing only what is needed, put any extra money available towards extra payments, and cutting down costs while you are in school. You will be able to live comfortably later after securing a job and greater salary. However, now is the time to cut expenses and focus on your studies.