April 2019
Top 5 Student Loan Mistakes (and How to Avoid Making Them)
Before you borrow, it is important to arm yourself with the information and knowledge to help you become an informed borrower. FAME has developed TheLoanforME.com to support you in this process. Below are common mistakes borrowers make that we want you to avoid:
1. Taking On Too Much Student Loan Debt
Too many students borrow without worrying about how they’ll repay their loans. Often that’s because students believe their future salary will be more than enough to cover repayment. To avoid this mistake, make sure you get a good estimate of your future salary. Get started by visiting CareerOnestop . Check out FAME’s Student Loan/Salary Calculator to determine a reasonable level of debt for your career path. If your loan payments look to be too high, explore options to reduce borrowing, or learn more about income based repayment options .
2. Spending Every Loan Dollar You Receive
Students often think they need to borrow the full amount listed on their award letter. However, that is not always the case! Before borrowing, create a budget , which will help you to borrow only what you need. And, if you have more money than you need, you can return loan money part way through the school year. When you return through your school, they’ll even refund your loan fees. Every little bit counts – money that you don’t borrow now is money that you won’t have to repay (plus interest) when you leave school.
3. Not Knowing What You Owe
Many students borrow each year without any real sense of their total borrowing, or what their future monthly payment (plus interest) will be. When they are ready to go into repayment, they are sometimes shocked by these amounts. You can avoid this by keeping track of your total borrowing each year and by calculating the associated monthly payment on a regular basis. To track your federal loans, visit studentaid.gov . Also, check with your financial aid office for additional information about your borrowing.
4. Not Completing Your Degree
Students who withdraw from school after they have borrowed student loans are the most likely to struggle with repaying their loans, even when the amounts borrowed are relatively small. While it is important that you borrow responsibly, it is equally important that you complete your degree. Graduating on-time also helps to reduce the total amount that you borrow. If you need help from others to stay in school, be sure you ask. If you do have to leave school early, consider these helpful tips before you leave.
5 . Making Late Payments or Defaulting on Your Loan
Some borrowers have difficulty making their student loan payments on time. Borrowers who miss several payments are at risk of having their loan go into default. Defaulting on a federal student loan will negatively impact your financial wellness. However, all of this is avoidable. Federal student loans offer numerous repayment options for borrowers who are experiencing a financial hardship. The most important thing to remember is to ask for help – call your loan servicer or FAME. We’re here to help!
Want More Information?
Join us for this month's FREE Wednesday Webinar:

Smart Borrowing - What You Need to Know About Student Loans
Wednesday, April 10, 2019
10:00–11:00 a.m.

Students and parents have many questions about both federal and private student loans. In this session we'll review the loans available and discuss how they are different from one another. We'll share what types of information impact private loan approval and provide resources to help families make an informed decision.
For additional helpful information and resources, find  previous issues of 5 on the 5th on our website.

FAME's College Access and Financial Education Team:

Mila Tappan, College Access and Outreach Manager
Jessica Whittier, College Access Counselor 
Nikki Vachon, College Access Counselor
Maria MacDougal, College Access Counselor
Floreka Malual, College Planning Advisor
Mary Dyer, Financial Education Officer
Jennifer Lanphear, Education Programs Officer
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