Be sure to file a Free Application for Federal Student Aid (FAFSA) as soon as possible after you apply to IUPUC. 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.
Make sure you pay close attention to the FAFSA deadlines—the difference they can make to your aid is significant.
Learn how to file your FAFSA
Start with the Office of Scholarships and the IU Foundation, but 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? Here are a few ideas to get you started:
Federal loans tend to have lower interest rates and better payment plans. Plus you don’t have to start paying them back until after you graduate.
Does your FAFSA show that you have financial need? If so, you may be eligible for a Federal Direct Subsidized Loan. That means you can take out a federal loan without being charged interest until six months after you graduate or after you drop below half-time enrollment. So if you borrow $2,000 now, you’ll owe only that $2,000 upon graduation. But once that six-month period passes, interest will start accruing.
Learn more about loans
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. And you should use your loan only for essential student expenses—those you won’t mind still paying for ten years down the road. (In other words, don’t use your loans to pay for lifestyle choices such as vacations, dinners out, or new clothes.)
See it in action
Undergraduate student Lana decided to take out a Federal Direct Subsidized Loan with a 4.29 percent interest rate. Her plan was to pay about $57 a month after graduation. When she ran the numbers to figure out how much to borrow, here’s what she found:
|Borrowing more||Borrowing less|
|Total repayment cost||$6,774||$3,339|
|Years to pay off||10||5|
By borrowing $2,500 less, Lana will save $935 in interest and pay off her loan in half the time without increasing her planned monthly payment.
Pay your bills in full and on time to avoid fees and charges, and to start building your credit history. And before you buy something you don’t really need, consider whether you have the funds for it. It’s better to do without than to get into financial hot water.
Learn how (and why) to budget Create your budget
Using cash will keep you from overspending, because when it’s gone, it’s gone. It’s good to have a credit card in case of emergency, but avoid using it unless it’s absolutely necessary.