Money Management Tips:

Money management is just as important after you leave school as when you were attending. But your income will now come from work earnings rather than from student aid and you’ll probably have some different expenses when you start your new job. The following tips will help you manage your money so that you can meet your household expenses and keep making on-time loan payments. In the process, you will be establishing a good credit rating, which is a key to your financial independence.

• Develop a budget that includes items like rent, car payments, utility bills, food, clothing, insurance, and entertainment, so you have an accurate picture of your monthly expenses (in addition to your loan payments). You may use the budget outline on the next page as an example. It’s easy to underestimate or overlook some of these expenses, so you may want to round each of your estimated costs up. If your income is less than your expenses, you’ll need to find ways to cut your expenses. If you find you just can’t make the loan payments, contact your loan holder or loan servicer to discuss options that may help, such as changing repayment plans, or deferment or forbearance.

• As a borrower, know your student loan rights and responsibilities. Make sure to apply for a deferment if you’re going back to school or are eligible for an unemployment or economic hardship deferment. Keep your loan holder or loan servicer informed of your address, phone number and other information, and contact your servicer if you’re having trouble making payments. Keep your loan paperwork in a safe place, including your promissory note, disclosure notices and billing statements. Remember, talk to your servicer when you have questions or concerns.

• Make the most of your grace period. Each of your Subsidized and Unsubsidized Loans has a 6-month grace period, and you don’t have to start making payments until it ends. There is no grace period for PLUS Loans, but you may defer repayment on PLUS Loans that were first disbursed on or after July 1, 2008 for an additional six months after you graduate, withdraw from school, or drop below half-time enrollment status. Your grace period is an excellent time to get your finances in order. If you are working, you can use the grace period to get a head start on repaying your loans. By making some payments during the grace period, you can reduce the interest costs for your loan. These payments don’t have to be set monthly amounts—you can choose to prepay some of your loan or just to pay the interest that is charged on any of your loans that are unsubsidized.