- If you must take student loans, go for subsidized loans first, then unsubsidized and then private loans. Subsidized loans do not accrue interest during the time when you're in school while unsubsidized loans do. Subsidized and unsubsidized loans have lower interest rates than private loans and you do not have to make payments while in school. Private loans commonly have higher rates and in some cases, you may have to repay the loan while in school.
- The average college student graduates with about $21,000 of student loan debt. Monthly student loan payments should not exceed 10 percent of expected gross income, according to finance writer Liz Pulliam Weston. Investigate the average pay for graduates in your field then determine how much student loan debt you can reasonably afford using an online loan calculator. Spend conservatively while in college, especially if you must use loan money.
- Some students automatically assume that in order to go to school, they'll have to use federal or private funding in the form of student loans to bridge gaps between scholarships, grants and the tuition bill. But in truth, it's a better strategy to take whatever steps required to cover remaining costs with your own money. Work a summer job before attending college in the fall and save money toward tuition. Take a part-time job during the school year if possible to help cover the next semester's bill. Make sacrifices now to avoid student loan payments (including interest) later.
- Create a personal budget while you're in college to help you manage your student finances. You can use a budgeting program, like Budget Calendar or Microsoft Money, or just a simple spreadsheet program like Microsoft Excel or OpenOffice Calc. Include everything from the petty cash you need for buying snacks to books for your classes each semester. Maintaining a strict budget helps you save up money to pay for your tuition and expenses.
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