Parents: What You Should Know Before Applying for a Student Loan

Before filling out loan applications or accepting student loans, consider future repayment and whether you or your student is going to be responsible for making payments.

While your student’s financial aid award letter may list federal student loans, be aware that undergraduate students can take out only so much in federal student loans each year. If additional student loans above that limit are required, you may need to consider private student loans or parent loans.

Future Repayment Considerations

Here are some of the considerations you and your student will need to think about when using loans to pay for college.

The debt will need to be repaid.

Student loans are not usually dischargeable for bankruptcy or other financial hardship. When you think about a future repayment amount, remember:

  • The repayment amount will be more than the original loan amount. Student loans accrue interest on a daily basis. At certain times, unpaid accrued interest may be capitalized, or added to the principal balance, and begin accruing interest as well.
  • Payments may come from a limited income. Carefully consider how much a graduate with your student’s major can realistically expect to make in an entry-level position and how student loan payments may affect a limited budget. Our free online tool, Student Loan Game Plan, can help your student see how student loan debt may have future financial implications and provides ideas for borrowing less.

Interest and other payments can be made during college.

Most lenders, including the federal government, allow early or extra payments on student loans at any time without penalty. In addition, paying interest as it accrues during school can reduce the amount of interest that will need to be repaid after graduation.

College choices matter.

If you find that you or your student cannot afford to take on enough debt to pay the full cost of attendance, a new plan might be essential. Some options for students include:

  • Earning more. Your student can increase the ability to pay college costs as they occur by earning more income during school terms and on breaks.
  • Reducing expenses. The full cost of attendance may include expenses that can be cut. Can living off campus without a meal plan save money? Are the book and fees and transportation costs realistic for you or your student?
  • Asking for help. Are relatives willing to help pay for college? Are additional scholarships, either through the school or outside entities, available?
  • Attending a less-expensive school. If the cost of attendance is still not affordable without taking on unmanageable debt, your student may need to consider attending a less-expensive school, at least for a year or two.

Visit Student Loan Game Plan for more information and tips.

Clarify repayment responsibility.

Be sure you discuss with your student who is going to be responsible for making payments on additional private or parent loans that will be taken out. Remember that lenders and federal loan servicers will consider the person who signed the promissory note or credit agreement to be the responsible party regardless of any verbal agreement you make with your student.

Options for Parents Taking Out Education Loans for Their Child

If you intend to take out loans in your name to help with your child’s college expenses, consider these options.

Private Educational Loans

Private educational loans created for parents can be a good option for parents who have solid credit and a low debt-to-income ratio because they tend to qualify for lower rates than are available with a federal parent PLUS loan. Some private educational loan options, like our College Family Loan, do not have origination and payment late fees, while the federal parent PLUS loan has both.

Parent PLUS Loans

The parent PLUS loan is a federal loan that is an option for parents who need more money to pay the full cost of college and may be included in financial aid letters.

Approval for a parent PLUS loan does not take into consideration income, other outstanding debt, assets, income or years to retirement, so consider carefully how much you will realistically be able to repay.

Compare Iowa Student Loan’s private student loan for parents to the parent PLUS loan.

Options for Students Taking Additional Student Loans

Students need to have a creditworthy cosigner for any private student loans, unless they can meet underwriting criteria on their own.

Every lender has its own underwriting criteria, qualification requirements, loan terms and repayment schedules. Before your student signs for a loan or you cosign with your student, research your options. Consider:

  • Variable vs. fixed interest rates. A variable rate may go up or down according to market conditions, while a fixed rate remains the same throughout the loan term. A low variable rate is often appealing, but remember that it may change drastically over the loan term.
  • Actual interest rate. Many lenders offer different rates based on the applicants’ and cosigners’ credit. If you are unable to determine your rate upfront, consider the highest rates.
  • Repayment assistance and benefits. Some lenders or loan servicers offer assistance if a borrower is unable to make required monthly payments. Some loans also offer special benefits, such as a reduced interest rate for making automatic electronic payments. Consider these features carefully.
  • Managing repayment. Will additional loans be needed for future years? Should all loans be obtained from a single or limited number of lenders to make repayment simpler? Will consolidating multiple loans later be important, and does the lender offer that option?

Iowa Student Loan has private loans for both students and parents. Check out our competitive loans that works with your specific financial situation.

Comparing Salary to Debt

How do you know if you can afford a particular college or how much is too much to take out in student loans? One key indicator recommended by experts is a monthly student loan debt-to-income ratio of 8%–12%. An easier way to think of this is that total student loan debt, for all years of college, should be no more than the expected first-year salary.

Iowa Student Loan’s Student Loan Game Plan is an interactive online tutorial that walks students through this concept, as well as several other important points about borrowing for college, including:

  • Stories about the issues faced by real-life borrowers when they took on too much student loan debt.
  • Common choices students make that can affect their overall student loan debt level, including how long it takes to graduate, working during college, living arrangements and monthly spending.
  • A realistic starting salary and yearly borrowing level for specific college majors.
  • The ability to see how making voluntary interest payments during college affects total estimated loan repayment and monthly payment amounts.
  • A sample monthly budget for after college that includes income based on the user’s choice of major, student loan payments and national average expenses.
  • Tips for reducing expenses and the need to borrow to pay for college costs.
  • An action plan to commit to actions students can take before and during college to reduce overall debt levels.

Make your Student Loan Game Plan now.

By: Iowa Student Loan

How Working Can Help Your College Student

Wking-Help-College-Student

The financial, networking and training benefits of working part-time while in college can seem pretty obvious. Students earn cash that can be used to offset loans, pay college costs and fund other expenses. They learn to value money and to budget. They can connect with professionals who may be able to help them locate and succeed in future jobs. They learn how to navigate the workplace, gain skills they can use in their careers and put classroom lessons into practical use.

What may not be so obvious is how working part-time during the academic year can also boost a student’s grades. Although a student’s first job is performing well in school, working for pay a few hours a week may help the student achieve more academically.

The most recent data available from the National Center for Education Statistics (NCES) demonstrates that the academic performance of students who work 1–19 hours a week was better than all other students’ performance, including those who worked more or less and those who didn’t work at all.

According to 2016 NCES data:
  • The average GPA for all full-time college students is 2.94.
  • Those who worked 10–19 hours per week earned an average GPA of 3.02.
  • Those who worked 1–9 hours per week earned an average GPA of 3.08.
  • Those who did not work earned an average GPA of 2.94.

GPA Per Hours Worked

Estimated Hours Worked Per Week

Average GPA

0–40+ (overall) 2.94
0 2.94
1–9 3.08
10–19 3.02
20–29 2.88
30–39 2.86
40+ 2.95
Source: U.S. Department of Education, National Center for Education Statistics, 2015–2016 National Postsecondary Student Aid Study (NPSAS: 16)

Why Working Works

The reasons for the grade boost may vary widely by student, job and college, but researchers often conclude that the busier schedule forces students to better manage their available time.

Hanna, a graduate of an Iowa high school attending Kansas State University, agrees. “Having the extra responsibility of a part-time job forces me to study more efficiently,” she said. “I know I won’t have the time to keep procrastinating.”

Another possible reason for the higher average GPA may be that students who work to pay for part of their education expenses are more invested in the outcome. Students who are likely to succeed because of their own goals and motivation may also be more likely to look for and obtain part-time work.

By: Iowa Student Loan

Know Your Student Loan Servicer

KnowYourStudLnServicer

As you begin your life after college, you likely have several different responsibilities, from a new job to managing your own insurance and other activities. One important task is to get to know the servicer or servicers for your student loans.

What Is a Student Loan Servicer?

Your student loan servicer is the organization that handles customer service, including collecting and tracking your payments, for the loan. Depending on the number and type of your student loans, you may have one servicer or several.

Why Do I Need to Know Who My Servicer Is?

You need to be aware of your servicer for several reasons.

  1. You will soon need to start repaying your student loans, and you need to know where and when to send payment. You may also want to set up features, such as an online account and automatic withdrawals, that will help you manage your student loan payments.
  2. Your servicer can help you understand and choose from available payment plans. Most borrowers enter repayment under a standard payment plan that pays off the loan in equivalent monthly payments over the full term of the loan, but you may be able to choose a different plan that works better for your current situation. If you are entering the workforce at less than what you expected to earn, you may be able to make lower payments based on your income or according to a preset formula at first. If, on the other hand, you have the chance to make higher payments now before you have additional family, car and housing expenses, work with your servicer to determine the best way to pay down your debt.
  3. Your servicer may offer assistance if needed. If you don’t have or lose your income or you face another difficulty that makes student loan repayment challenging, you may be eligible to postpone payment. You will need to work with your servicer to understand your options and choose the one that works for you. Be aware that interest continues to accrue on student loans during repayment, and unpaid interest may capitalize, or be added to your principal balance, at the end of assistance. In certain cases, you may be eligible to have some or all your student loan debt forgiven, and your servicer can help with that as well.

How Do I Locate My Servicer?

Your servicer may be the entity that provided your loan or it may be a separate entity that acts on behalf of the current owner of the loan.

  1. Determine if you have federal student loans. Often called Stafford or Direct loans, these loans are provided by the federal government and were likely included in the financial aid package you received from the college you attended.
  2. Use your FSA ID to log in to the National Student Loan Data System. If you filed a Free Application for Federal Student Aid after May 2015, you probably created an FSA ID then. If it’s been some time since you filed a FAFSA, you may need to visit fsaid.ed.gov to create an ID. Then go to nslds.ed.gov to log in and view your federal loan information, including the servicer.
  3. If you have private student loans you obtained from a bank, credit union or other lender to pay remaining college costs after your financial aid, refer to the information your lender provided when you took out the loan and progressed through school. As the due date for your first payment approaches, you will likely receive communications from the lender or servicer about how to make your payment.

If you can’t locate a private student loan servicer, contact the entity that lent you the money or your financial aid office. You may also be able to see your lender or servicer name on your credit report (remember to access a free report at annualcreditreport.com).

By: Iowa Student Loan

Know Which Student Loans Are Right for You

Financial aid letters may include more money — through federal loans — than students or families need, and it’s not always clear that students and parents don’t need to accept the loans or the full amount of all loans.

It may seem obvious, but reducing the amount borrowed today will mean less debt after graduation. Especially since borrowers not only have to repay the original loan amount but also the interest that accrues daily on those loans. Once a loan has been accepted and the funds have been sent to the college or university, the student (or parent, in the case of a federal parent PLUS loan) is responsible for repaying it, no matter how the college journey ends.

If the federal loan amount on a student’s financial aid letter seems like more than the student will need, students and parents do have the option to accept less than the offered loan amount or decline one or more loans completely. And if the financial aid and offered federal loans are not enough, private student loans and parent PLUS loans are options to fill any funding gaps.

Let’s take a look at the different types of loans that are available and how to decide which ones to maximize and which to minimize or dismiss completely.

Types of Student Loans

Student loans, and education loans for parents or family members, are not all the same. Loans for college fall into two categories: loans (called federal loans) backed by the federal government and loans (called private loans) offered by private companies, like banks, credit unions and student loan–only financial institutions.

Understanding the differences between these loans and the types of each can help students and families decide which loans to accept and which to decline or reduce.

Subsidized and Unsubsidized Federal Loans

Subsidized federal loans are for students who show a financial need, and the federal government pays the interest during specific periods, such as when the student is in school. Information students provide on the FAFSA (Free Application for Federal Student Aid) each year determines if they qualify for subsidized federal loans.

Unsubsidized federal loans are an option for all students who complete the FAFSA as financial need is not considered. The student is responsible for all interest, which starts accruing at the time the loan funds are sent to the school.

For both subsidized and unsubsidized federal student loans:

  • The student is responsible for repaying the loan.
  • Repayment begins when the grace period ends, which is typically six months after graduation, dropping below half-time enrollment or leaving school.
  • There is a loan fee of just more than 1% for subsidized federal loans that is deducted from the total loan amount before it is sent to the college or university.

Take advantage or minimize this loan? These are the best student loans to accept the full amount offered or as much as necessary, if loan funds are needed.

Private Loans

For Students
Private student loans are an option for students who need extra funds to cover college costs after exploring and exhausting all sources of student financial aid. Students typically need an eligible cosigner, and loan terms and offers vary by lender. Typically these loans have fewer benefits and may have higher rates than federal loans for students. The student and cosigners, if applicable, are responsible for repaying the loan. Repayment typically starts six months after the student graduates, drops below half-time enrollment or leaves school. However, programs vary, and lower rates may be offered if payments are required to be made while the student is in school. In today’s market, most private loans offered to students with creditworthy cosigners do not include an upfront origination fee.

Take advantage or minimize this loan? Students should exhaust any federal loans for students before considering a private loan, only borrow what is needed and consider their ability to successfully repay these loans.

For Parents
Private loans for parents are another option for families who cannot cover expected college costs after the student’s financial aid is exhausted. These loans are usually available to parents, guardians and even family members. Rates for these loans will often depend on the borrower’s credit score and debt-to-income levels. Not all parents will qualify for these loans, but those who need these loans want to ensure that the rates they are offered are lower than the parent PLUS loan. In today’s market, most private loans offered to creditworthy parents or others do not include an upfront origination fee.

Our College Family Loan is one such private loan option — offering lower fixed rates than the parent PLUS loan and no fees — for parents, family members or others who wish to help with a student’s college costs.

Take advantage or minimize this loan? If additional funding is needed, borrowing through a private lender should be limited to only what is needed and borrowers should consider their ability to successfully repay these loans in the future.

Federal Parent PLUS Loans

Parent PLUS loans are federal loans for parents of undergraduate students (PLUS loans are also available for graduate or professional students). PLUS loans typically have higher interest rates than loans for undergraduate students, but applicants nearly always qualify for the loan.

For parent PLUS loans, the biological or adoptive parent (or in some cases, the stepparent) is the only one responsible for repaying the loan, and those payments start as soon as the funds are disbursed to the school. Parents can request a deferment so that payments are not required while the student is enrolled at least half time and during a grace period. There is a loan fee of more than 4% for PLUS loans that is deducted from the total loan amount before it is sent to the college or university.

Take advantage or minimize this loan? Use caution with these loans and borrow only what is needed. Keep in mind that the terms and repayment choices offered for PLUS loans are not as generous as federal loans for students. If possible, parents should try to determine if they can receive a better rate and fee combination from a private lender.

Iowa Student Loan’s Private Student Loan for Parents

Parent PLUS loans may appear to be part of the offered financial aid, but it is not required that parents accept the loan. These also may not be the best loan option for parents with good credit. Before accepting a parent PLUS loan, parents or family members wishing to help a student with college costs may want to compare the terms and benefits of a parent PLUS loan with private educational loans, like our College Family Loan.

The College Family Loan is for creditworthy parents or family members who wish to assist college students with their education expenses. The College Family Loan:

  • Features lower rates than those currently available for the parent PLUS loan.
  • Has no origination, prepayment or late fees.
  • Offers three repayment options during the student’s college years.
  • Is not limited to parents, unlike the parent PLUS loan.
  • Is available no matter where in the United States the student attends college or where the student or borrower lives.

Learn more about the College Family Loan

Plan to Transfer? Tips for a Smooth Transition

The process of transferring from one college to another can be painstaking and time-consuming. These tips can help you transition more easily.

Transfer for the right reasons.

You may be in a two-year program looking to complete a four-year degree, you may be looking for a specific program your current school falls short on, you might want to move closer to or further from home, or perhaps you chose a less-desirable college to begin with when you weren’t accepted to your top-choice schools. These can all be good reasons to change. Other problems, like an inability to form a social group, mental or emotional issues, or financial or academic struggles, may or may not be solved by attending a different school. Have a plan for how the transfer will resolve these issues.

Start the process early.

The steps detailed below can take time and effort. To increase your chances of success in your new college, give yourself plenty of time to handle the transfer process.

Keep up with your current coursework.

This may be difficult depending on your reasons for transferring, but a high GPA and good recommendations from your current professors will increase your chances of being accepted to a new program.

Fill in the blanks.

Once you have a list of target schools, research the following to be sure you have the complete picture before applying.

  • Transfer acceptance rate: Generally, the acceptance rate for transfer students is slightly lower than it is for incoming freshman. You can find transfer statistics for a specific school by doing an online search for the college name and “Common Data Set” to see data reported by the college. Don’t forget that competitive or impacted majors may have separate eligibility requirements or acceptance rates at some colleges.
  • Admission requirements: Make sure you meet the minimum number of credit hours, minimum GPA and other eligibility requirements for transfer students. Start on the college’s website. Also, if a target school is one that accepted you as an incoming freshman, contact the school to determine if your previous acceptance still stands or if you need to re-apply.
  • Application process: Some programs will require transfer students to provide letters of recommendation, transcripts from college and maybe high school, or an essay explaining why they want to transfer. If you’re asked to write an essay, remember to provide specific details on how the new program is a better fit for you rather than writing negatively about your current school.
  • Aid available to transfer students: Many schools offer their largest scholarships to incoming freshmen. Research the grants and scholarships available to transfer students from the target school and the department to have a better idea of affordability.
  • Fit for academic and career goals: Make sure the new program is a fit for your goals by looking at graduation and placement rates, course descriptions and syllabi, and career and academic services offered.
  • Credit transfers: Even when transferring from a community college to a four-year program with an admissions or articulation agreement, you may find that not all your credits apply in the same manner at the target school. Be sure you understand how credits will be applied toward graduation and program requirements so you know if you will graduate on time without repeating coursework or outlasting scholarships with a renewal limit.
  • Transfer atmosphere: Find out how transfer-friendly your target schools are by seeing if they offer academic advisers, orientation programs, visits, housing or other programs specifically for transfer students. These offerings can make a difference in your ability to find a new social community and assistance on a new campus.

Know how your financial aid is affected.

Besides merit aid available to transfer students, understand how your current financial aid will be affected by a move. Use the Common Data Set and call the financial aid office to find answers to your questions about aid at a new school.

  • Change in federal funds: Some federally funded but campus-based aid, like Federal Work-Study, is never portable. You will lose these awards and may or may not see them matched by your new school, depending on that school’s cost of attendance, financial aid policies and available funds. Federal loan limits may also be affected by transferring from a two-year program to a four-year college. If you transfer mid-term, some federal financial aid funds may be returned to the government.
  • Loss of state and institutional aid: Your current school will no longer provide financial aid awards for attendance at your new college. If you change states, you will not receive funds from the state of your previous college; if you stay in the same state, you may receive fewer state funds based on timing and funding availability.
  • FAFSA updates: Unless you transfer between academic years, you will need to update your current FAFSA with your new school choices. This will result in a new Student Aid Report and financial aid packages from the new schools. If you don’t receive this information within four weeks of resubmitting your FAFSA, contact each school’s financial aid office.
  • Student loan repayment timeline: Contact your student loan lender about your plans to leave one school and re-enroll in another. If you are re-enrolling immediately at least half time, you will likely be eligible for deferment on your student loan payments; otherwise, you may need to start repaying previously disbursed loans within six months.
  • Other financial considerations. If you currently attend school as in-state student but plan to transfer to an out-of-state college, your tuition costs may increase dramatically. In addition, if the transfer of credits or changing programs results in taking longer to graduate, you will incur additional costs before graduation.

Make connections.

Once you know which schools you will apply to as a transfer student, start making connections. Contact academic advisers, professors and internship offices to understand how they will assist you in your new program. Visit campuses if possible. Connect with other students, especially other transfer students, through social media.

Get a good start.

Once you have finalized your transfer choice, continue to connect with other transfer students at orientation sessions specifically for transfer students. Get involved in activities and talk to classmates in your upper-level courses to meet more people with interests similar to yours. Find an on-campus job to meet people and earn extra money. Get to the career center right away to be sure you’re ready to take on internships and find a job after graduation.

By: Iowa Student Loan

Maximizing Summer Earnings for College

MaximizingSummerEarnings-College

About this time of year, panic tends to set in for new high school graduates looking at their upcoming college costs. If you’re planning to work this summer to offset some of your college expenses, consider these tips.

1. Know How Earnings Affect Your Financial Aid

Although your financial aid has already been determined for the upcoming year, your annual income can affect future aid.

The Free Application for Federal Student Aid, or FAFSA, provides an income protection allowance — the amount you can earn during a calendar year before your financial aid package is affected. For the 2015–2016 year, this amount was $6,400.

You shouldn’t necessarily try to limit your annual income to less than the income protection allowance, however. The income tax you pay on your earnings is also taken into account, and the type of aid you receive makes a difference. Offsetting student loans with income is beneficial, while earning enough to reduce need-based grants isn’t so great.

If you have questions about how your earnings will affect your future aid, talk with a financial aid officer.

2. Make a Plan for Your Earnings

The amount you need to save from each summer paycheck is determined by your goals. Are you planning to offset specific expenses, such as clothing, books or entertainment, for the school year? Are you planning to earn enough to make interest payments on student loans?

Use your goals to determine a percentage of each paycheck to put into savings. Don’t forget that you may need to use part of each paycheck to cover current expenses, such as work clothes, gas and car insurance, and that you will have taxes and other deductions removed from each check. You may also want to plan on spending a little each month on summer entertainment as well.

3. Simplify Your Saving

It’s often tempting to use cash in hand, and sometimes students find they’ve spent the money they intended to save without really thinking about it. Avoid the cash crunch by:

  • Depositing your pay right away. If you have the option to have your check direct-deposited into a checking account, take advantage of it. If not, or if you are paid in cash, deposit it directly after you receive it to avoid unnecessary spending.
  • Automating your savings. Set up an automatic transfer from your checking account to your savings account that corresponds with your pay date. For example, if you are paid by direct deposit every other Friday morning, have an amount equal to the percent of your check you want to save automatically transferred to your savings account on those Friday afternoons. Time the transfer as close to the deposit as you can without risking overdrawing your checking account.

4. Stick to Your Goals

Once school starts in the fall, remember what you worked so hard for over the summer. If you intended to use your summer earnings for books, don’t let the desire for new clothes or evenings out distract you from your goal. If you haven’t already considered it, think about a part-time job during the school year to pay for other items you want or need.

By: Iowa Student Loan

Before Applying for a Student Loan

So, awarded financial aid isn’t enough to cover the full cost of attendance and you know you or your student will need additional student loans to pay for college. Before filling out loan applications, consider future repayment for any loans. Here’s what you need to know.

Federal student loans are limited.

Undergraduate students can take out only so much in federal student loans each year. If additional student loans above that limit are required, you may need to consider private student loans or parent loans.

Undergraduates need adult assistance.

Students need to have a creditworthy cosigner for any private student loans, unless they can meet underwriting criteria on their own. If parents are willing to consider a federal Parent PLUS Loan, the parents will need to borrow that money and be responsible for paying it back themselves.

The debt will need to be repaid.

Student loans are not usually dischargeable for bankruptcy or other financial hardship. When you think about a future repayment amount, remember:

  • The repayment amount will be more than the original loan amount. Student loans accrue interest on a daily basis. At certain times, unpaid accrued interest may be capitalized, or added to the principal balance, and begin accruing interest as well.
  • Payments may come from a limited income. Carefully consider how much a graduate with the same major can realistically expect to make in an entry-level position. Add anticipated student loan payments for all the undergraduate years, including any federal loans in the financial aid package, to anticipated expenses for a realistic budget based on a starting salary. If all your expenses can’t be covered with a realistic starting salary, student loan debt may need to be reconsidered.

Interest and other payments can be made during college.

Most lenders allow early or extra payments on student loans at any time without penalty. In addition, paying interest as it accrues during school can reduce the amount of interest that will need to be repaid after graduation.

Private student loans vary.

Every lender has its own underwriting criteria, qualification requirements, loan terms and repayment schedules. Before you sign for a loan, research your options. Consider:

  • Variable vs. fixed interest rates. A variable rate may go up or down according to market conditions, while a fixed rate remains the same throughout the loan term. A low variable rate is often appealing, but remember that it may change drastically over the loan term.
  • Actual interest rate. Many lenders offer different rates based on the applicants’ and cosigners’ credit. If you are unable to determine your rate upfront, consider the highest rates.
  • Repayment assistance and benefits. Some lenders or loan servicers offer assistance if a borrower is unable to make required monthly payments. Some loans also offer special benefits, such as a reduced interest rate for making automatic electronic payments. Consider these features carefully.
  • Managing repayment. Will additional loans be needed for future years? Should all loans be obtained from a single or limited number of lenders to make repayment easier? Will consolidating multiple loans later be important, and does the lender offer that option?

College choices matter.

If you find that you or your student cannot afford to take on enough debt to pay the full cost of attendance, a new plan might be essential. Some options students have include:

  • Earning more. Increase the ability to pay college costs as they occur by earning more income during school terms and on breaks.
  • Reducing expenses. The full cost of attendance may include expenses that can be cut. Can living off campus without a meal plan save money? Are the book and fees and transportation costs realistic for you or your student?
  • Asking for help. Are relatives willing to help pay for college? Are additional scholarships, either through the school or outside entities, available?
  • Attending a less-expensive school. If the cost of attendance is still not affordable without taking on unmanageable debt, you may need to consider attending a less-expensive school, at least for a year or two.

Visit Student Loan Game Plan for more information and tips.

By: Iowa Student Loan

Seven Reasons to Seek Seasonal Employment (Infographic)

7ReasonsSeekSeasonalEmploy-infographic

Download this infographic as a PDF

As you consider summer employment, you may want to look for seasonal opportunities. Working for an organization that does a large part of its business during a specific time of year can be especially suitable for college students. Here’s why.

1. Work during school breaks.

If you carry a heavy course load or need to dedicate a lot of time to your academics to maintain a specific GPA, it may be difficult to fit in a part-time job during the school year. Seasonal employment, however, is often at its peak during the holidays or the summer, fitting nicely into the slots between academic terms. You may even consider a combination, such as working retail over the winter break and working at a resort in the summer.

2. Work over several years.

Once you’ve worked your first season, and especially if you performed well, you can often count on returning to the same place in future seasons. As a bonus, because you have experience, you may find yourself earning more and taking on more responsibility supervising newer workers.

3. Fill gaps in your regular employment.

If you work on campus or for a local establishment that relies on student or faculty patronage through the school year, seasonal work can provide extra hours and cash when that job slows down.

4. Try on your future career.

Many seasonal jobs can be tied to career goals and provide a good opportunity to experience work in your chosen field. Farm and landscaping work abounds for students interested in agriculture or horticulture. Conservation students may be able to find work at a fishing lodge or forestry station. Education majors are in demand as counselors for summer camps. Resorts often look for summer staff to work with the public.

5. Maximize your available time.

Because certain seasonal and recreational establishments do not need to pay overtime to workers, you may be able to work much more than 40 hours a week. Besides accumulating more cash, you may find that you spend less because of your location or work hours.

6. Live inexpensively.

Depending on the work and location, seasonal employers may provide housing at reduced or no charge for workers. If you normally live on campus or are able to sublet your off-campus housing, this means you can earn money throughout the season without a large housing expense.

7. Find new peers.

The appeal of your seasonal work will draw other students, perhaps from other states or regions, who share your values and goals. This is your chance to develop a network of peers who are interested in the same things you are.

By: Iowa Student Loan

Pay Off Your Student Loans Smarter (and Faster)

Ever feel like you’ll be paying back your student loans for the rest of your life? You’re not alone; more than 57% of people with student loans  are concerned that they may be unable to repay that debt. Student loan debt can feel crushing at times, but there are many manageable ways to chip away at it. With these tips, you can work toward paying off your student loans smarter and faster.

Pay More than Your Minimum Student Loan Payment

One of the most effective ways to pay your student loans off quicker is to pay extra toward those loans each month. Paying the minimum required amount might be enough to keep you in good standing but that means it will still take you the entire repayment term to get out of debt.

Adding a little extra money each month toward your loans can make a big difference, and if you have the income to do this, you’ll save money on interest and time in repayment.

Make Additional Student Loan Payments Throughout the Year

If putting extra money toward your student loans each month isn’t possible, try making a few extra payments throughout the year. This is a great place to start if you’re still trying to figure out just how much you have left over in your budget each month. Set a goal to make an extra payment once every three or six months and see how that impacts your student loan debt.

Don’t Blow Raises and Bonuses

A bonus or raise at work can be thrilling, and it may be tempting to spend that extra money on some “splurge” items. If you receive an unexpected bonus or raise, though, and are not relying on the money for a specific need, you can spend it on your student loans. Doing this can really help to reduce your debt more and, if you put just the bonus or extra take home amount toward your loans, it won’t even impact your budget.

Make Some Extra Money to Put Toward Student Loans

If you feel like you don’t have enough income to contribute extra to your student loan payments, consider a part-time job to help with your budget. The best kind of part-time job is one where you get to do something you enjoy. For some people that means taking up tutoring, babysitting or music lessons. Others prefer to work at a restaurant or get a job at the mall (did somebody say discount?). Find something that works well with your lifestyle and schedule.

Just remember to make a plan to manage that extra income. Come up with a schedule for saving money or putting it directly toward the balance of a loan as you reach a certain amount. It can be very easy to spend money that is designated for loans if it’s just sitting around, so make sure you develop a good system for accountability.

Creative Ways to Make Extra Money

If you don’t want to commit to a part-time job, there are more creative ways to make money. Driving for a ride-sharing company allows you to earn some extra cash on your own schedule, without a set commitment. Or, you may be able to find freelancing work that fit with your skills; try searching the internet for freelancing gigs. Putting on a garage sale or selling higher-value items online or at a consignment shop can help you reduce your belongings while increasing your bank account. These are just a few unique ways to make extra money to pay down your student loan debt faster.

See if Loan Forgiveness Is an Option

Loan forgiveness is not necessarily too good to be true. Not all people are eligible for this benefit, but if you are eligible, loan forgiveness can save you thousands of dollars.

The federal government offers several loan forgiveness programs depending on your career and types of debt. However, there are lots of scams online about student loan forgiveness, so be sure to use a reputable source, like the Federal Student Aid website.

Many states also offer loan forgiveness programs for teachers, nurses and workers in other high-demand but lower paying fields. Be sure to check out what the state you live in offers as far as loan forgiveness programs. Another source is the financial aid office at the college or university you attended as those experts can help you find loan forgiveness or grant programs.

Budget to Save Money in Other Areas

Not sure how people manage to have left over money after bills, loans and fun? You should try budgeting! Budgeting is great because it establishes boundaries for your spending and helps you keep track of where your money is going. This monthly budget calculator can help you get started. When you’re not tracking your spending, you might not even realize just how much you’re spending on certain things.

Once you’re actively managing your spending, you’re more accountable and you’ll likely find you have more money to spend — money that you can put toward paying off loans, saving or investing.

Find Out if Refinancing Can Help You

Refinancing is an option anyone with student loan debt should look into as it’s one of the most effective ways to save money and pay off loans quicker without breaking the budget.

Refinancing your student loans is most worthwhile when you can lower the interest rate you’re paying or combine your loans into a single loan with a shorter term. Both of these cases can help you pay less in interest over the life of the loan.

Iowa Student Loan provides a simple and quick way to find out the rate you would qualify for with our refinance loan and it doesn’t impact your credit score. See if you qualify today.

If you have someone with good credit who is willing to cosign a new loan, you may qualify for an even better rate, saving you even more in interest charges.

Interested in learning more about our refinancing? Check out our beginner’s guide for refinancing.

Get Your Rate

Tips to Chip Away at Debt

Get creative! With a little bit of effort, your student loans will be gone before you know it.

Remember these tips to work toward paying off your student loans faster:

  • Pay more than the required minimum monthly payment amount.
  • Make additional student loan payments when you can.
  • Put any extra earnings or bonuses toward student loans.
  • Look at ways to increase your income or decrease your spending.
  • Consider refinancing your existing student loans.

By: Iowa Student Loan

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