It’s no secret that college can be a costlier investment. Depending on your financial status, it may seem as though your educational goals are slightly out of reach. However, there are resources, financial products, and counseling services available for almost every student that can help you start or return to your academic career.
Of course, there are so many products and services that it can feel overwhelming to narrow it down to a few focus areas. Luckily, four handy tips can help put prospective college and university students on the path to financial wellness. So, whether you’re filling out applications and preparing to enroll or you’re going into a graduate program, here are a few financial tips that are worth keeping in mind.
1. Shop around before committing to a loan.
Though personal loans and student loans are standard financial vehicles for prospective college students, it doesn’t hurt to shop around a bit before you commit to a specific loan term or monthly payment. While your interest rate and total loan amount may vary based on borrower information such as your credit score and your overall credit history, you may want to consider using a personal loan calculator to determine the actual rate you’d end up paying for the life of the loan. Plus, some loans have clauses and prepayment penalties that make it harder to navigate your repayment terms and maintain good credit.
Even if you don’t have robust creditworthiness, particular loans and financial products can help you avoid a higher interest rate. So shop around, compare annual percentage rates, and don’t be afraid to back away from a financial product that doesn’t seem like a good fit.
2. Meet with an admissions counselor.
Before you start setting up high-interest payments, it’s often helpful to meet with the admissions department to see if they can connect you with any financial resources and representatives. A college admission counselor can help guide you in the right direction and give you specific information based on your chosen program or your situation on many university campuses. For instance, if you have bad credit at the time of application, a college admissions counselor may recommend a financial institution that offers credit-building cards and accounts. They can also tell you more about certain student loan providers and online lenders. So don’t be shy about using on-campus resources to build and maintain financial literacy.
3. Try not to overextend your income.
If you find that you carry revolving credit card debt or that you regularly rely on credit cards for expenses that a debit card should cover, you’re not alone. Credit card debt is so omnipresent because it’s so tempting. However, when you rely on credit and only make the minimum payments each month, it can start to tank your credit score, affecting you down the road. Unless you need an additional line of credit for something, it’s helpful to avoid opening too many accounts. High credit usage doesn’t help anyone but your credit card issuer.
4. Avoid buying new if you can.
Thanks to online shopping, it’s easier than ever for U.S. students to buy gently used products, clothing, and textbooks for school. In addition, some professors have started using open-source textbooks or uploading digital files for use without charging students. However, new products tend to depreciate pretty quickly, so if you can wait for something, you should avoid picking it up until you can get it on sale or used.
While these aren’t the only financial tips that college students should keep in mind, they can help you start to learn more about each type of loan, how you can alter shopping habits, and why you should be reasonable with your credit card.