Making good financial decisions

Managing your money wisely is a key to an affordable education and less debt after you graduate. Here are some strategies you can use to avoid borrowing money for college or to reduce the amount you need to borrow.

• File your FAFSA. You may be able to take advantage of need-based grants and other gifts, which will reduce or eliminate your need to take out student loans.
• Look for scholarships. Make your search wide—don’t forget to look for scholarships in your hometown. Are there any civic or service organizations, private foundations, or churches that offer scholarships you may qualify for? Are you eligible for a military scholarship?
• Borrow federal loans. Federal loans tend to have lower interest rates and better payment plans than private loans, and you don’t have to start paying them back until after you graduate.
• Don’t borrow more than you need. If you absolutely must borrow money, don’t borrow more than you need for any given academic period. The more you borrow, the more you have to pay back—and the more interest you’ll pay. Even if you’re offered a large loan, you don’t have to accept the full amount.
• Attend all your classes. Missing a class is like throwing away cash—you’re paying for each credit hour, so be sure you get your money’s worth.
• Graduate on time. With IU’s banded tuition rate, you can take up to 18 credit hours for the same price as 12. Two extra classes a semester can really make a difference if you want to graduate in four years (or less). Adding extra semesters will increase the overall amount you end up paying.
• Repay your loans quickly. It goes without saying that the faster you repay your loans after you graduate, the less interest they’ll accrue. And there’s no penalty for paying most educational loans early, including federal direct loans.