The College Years

Have a plan. Know which college expenses they’ll cover and which you’ll have to pay. Once you agree, have them set up a plan for disbursing funds. Monthly payments work best: if they give you a large lump sum at the beginning of the semester, you might spend it all the first few months, and you’ll never learn the value of living on a budget. 

Focus on budgeting. Maintain control of your money and limit spending by creating a budget. First, list all income (job, savings, and parental support). Then, list what you might spend in each category for a month – books, supplies, meals not covered by a meal plan, entertainment, personal care, laundry, telephone and Internet, car expenses, and clothes. (Revise the budget, if necessary, after the first month.) If expenses are higher than income, increase the income, maybe by adding a part-time job, or cut expenses. 

Student Loans
Federal student loans to have low interest rates and don’t require credit checks or collateral. They also have deferment options and extended repayment terms. 

Stafford Loans. There are two Stafford Loans:

1. Loans from the Federal Family Education Loan Program (FFELP) are made by some financial institutions, and are guaranteed against default by the U.S. government.
2. Federal Direct Student Loan Program (FDSLP) loans are made directly to students and their parents by the US government, not from private lenders.

Stafford Loans are subsidized or unsubsidized. You must show financial need to get a subsidized Stafford Loan, for which the federal government pays the interest while you’re in school. You don’t have to show need for an unsubsidized Stafford Loan; you pay the interest, with payments deferred until after graduation.

All lenders offer the same rate for a Stafford Loan, although some give discounts for on-time and electronic payment. Repayment begins six months after the student graduates or drops below half-time enrollment. The standard repayment term is 10 years, although you can get access to alternate repayment terms (extended, graduated and income contingent repayment) by consolidating the loans. 

PLUS Loans. The federally–sponsored Parent PLUS Loan is a low interest student loan for parents of undergraduate, dependent students. A PLUS Loan can fund the entire cost of education (less other financial aid). Parents of independent students are not eligible. 

Perkins Loan. This subsidized student loan is awarded to undergraduate and graduate students with exceptional financial need. Your school is the lender using funds provided by the U.S. government. The interest is paid by the federal government. The amount of your Perkins Loan (within limits) is determined by your school's financial aid office. 

Other Student Loans. If you need more financing than what federal student loans can provide, private loans are available.