Private student loans are not guaranteed by the government and their interest rates are not capped. Before considering one, make sure all government and institutional financial resources are exhausted. Review these suggested questions with lenders.
Limit your Level of Borrowing
It is critical, as you plan to enroll in college, to review your particular lifestyle and financial resources. Going to school may require an adjustment to your spending habits. For every dollar you can reduce in your current spending, you'll experience substantial savings in loan repayments.
Don't forget the benefits a part-time job can give you in reducing the need to borrow. It benefits you more than just the wage... you save the interest you would have accrued on a loan.
Suggestions for Reducing Expenses
- Share the cost of rent with a roommate(s) as it is expensive than living alone
- Consider campus housing, if available
- Have only one type of phone - either a cell phone or a home phone
- Use a pre-paid cell phone service without a contract or roaming charges
- Long distance charges a problem? Ask the phone company to set your phone to only receive long distance calls (not make them). Then, budget for and purchase pre-paid phone cards that will limit the long distance calls you make.
- Make long distance calls during reduced rate periods
- Understand the charges for texting, sending photos, and accessing the web from your cell phone before you are surprised by an enormous bill. Review and eliminate the more costly features to reduce your monthly cost.
- Do not purchase a car. Financial Aid cannot cover the cost of car payments. If you must buy one, purchase a dependable used car.
- Carpool or use university/public transportation. Pocatello Transit Bus service is FREE to students.
- Bicycle or walk whenever possible (scooters are a practical option, too)
- Take a higher deductible on auto insurance
- Drop collision insurance on older cars that are paid in full
- Park legally! Parking tickets and visitor lot charges add up!
- Considered purchasing the less expensive General Parking Permit. Park in one of the parking lots on the fringe of campus and bike to your destination or use campus shuttle.
- Watch for sales
- Never Buy on impulse, even if it is a good buy
- Ask yourself if you really need it or just want it
- Buy non-perishable items in bulk
- Avoid vending machines, fast food and convenience stores
- Avoid shopping when ever possible
- Don't buy something just because you have a coupon for it. Store brands or generic products maybe cheaper than the name brand with a coupon.
- Buy inexpensive clothing at local second-hand clothing stores and discount stores.
- As part of the university community, you may be able to use your student ID for discounts for movies, plays, museums and other cultural activities in the area.
- Planning for recreational activities should be done within the limits of your budget.
- Utilize inexpensive entertainment options offered by the University Activities, Theatre/Music Department, Residence Halls, Athletics, Recreation Center, Outdoor Activities Center, and the Games Center in the Student Union.
- When eating out, see if the restaurant has early bird or all-you-can-eat specials.
- Cancel the cable or satellite TV service
- Use the library to borrow books, check out DVD's/videos, and books on tape
- Check out the many discount movie theaters that have second-run movies
- Rent movies and exchange rentals with friends before they have to be returned
- Sign up with a credit union to possibly minimize your banking charges and costs
- Comparison shop for bank services: free checking, free checks, and no-fee ATM usage
- Use ATMs owned by your bank/credit union to avoid surcharges.
- Make certain you record and monitor your debt card and credit card charges
- Only use one credit card for emergencies and pay off the balance monthly
- Do not reply to unsolicited promotions for credit cards. Those offers frequently have unusually high interest charges. Shop for the lowest interest rate.
- The more credit cards you apply for the lower your credit rating will go, even if you never charge anything. (But retain existing cards with good payment history.)
(adapted from Tulane University Health Sciences Center)