WORKERS FORMULA TO TACKLING STUDENT LOANS IN COLLEGE
If you have student loans, then you may have already started to worry about how you plan to pay them back. When it comes to your federal student loans, you have two options. You can pay toward either the loan or just the interest payments while you are in school or your second option is to hold off on all payments until six months after you leave school, graduate, or drop below part time.
One of these options may affect you and benefit you more than the other. It is important that you take some time to evaluate both of the options available to you. In this article, we will discuss the workers’ formula to tackling student loans while you are in college. These methods can help you save thousands of dollars in interest payments and when you graduate, you will not have as much student loan debt.
Ways to Earn Money to Pay Down Your Student Loans in College
If you are looking for ways to earn money to pay down your student loans in college, we will explore three main ways that you can.
1. Federal Work Study Program
The Federal Work Study Program is in place to help provide students with an alternative financial aid option to student loans. This program includes part-time jobs that are usually on campus, but you may also find some employers off campus who team up with the school to offer employment.
To participate in the Federal Work Study Program, you must apply through the FAFSA each year. The FAFSA will determine the amount of aid you are eligible to receive through the program.
The Federal Work Study Program:
- Is available to all students, both part-time and full-time
- Is available to undergraduates, graduates, and professional students who have a financial need
- Provides students with part-time employment while in college
The jobs available to you in this program will range from working in the library on campus to the bookstore and even the guidance office. Each job is required to work around your school and class schedule.
The amount of money you earn from the job will depend on your financial need. Most of the jobs pay minimum wage, but you may find some that pay a bit more. It is important to apply early on for the Federal Work Study Program because schools only have a limited number of funds to be dispersed and these funds are approved on a first come-first serve basis.
2. Job on Campus
The second way that you can make money to pay down your student loans is to work on campus at your university. While some of the jobs are reserved for the Federal Work Study Program, you will find that there are both full-time and part-time jobs open to students who attend school on campus.
These jobs usually vary from helping out in the administration office to serving food in the cafeteria. On campus jobs typically pay minimum wage, but you may find some that pay a bit more.
The jobs available on your campus will depend on what the needs of the individual campus is. If you wish to work on campus, but not in the Federal Work Study Program, you should speak with your academic counselor, as he or she can refer you to the correct person.
3. Part-Time Job in the Local Area
If you do not qualify for the Federal Work Study Program or you cannot find a job on campus, you can look for a part-time job outside of campus. Many retailers and businesses hire college students to assist them throughout the year. These employers will often work around your schedule.
If you do choose to work part-time at a local establishment, look for a job that interests you. If you are looking to make additional cash in your downtime from school, consider a holiday job or a summer job.
How Tackling Your Student Loans Early Can Benefit You
Using the above methods to pay off your student loans while you are in school is extremely beneficial for you. For example, you can save thousands of dollars in interest payments of the years.
In addition, you will learn how to properly budget your money and more about your personal financials. As you work and earn a paycheck, you cannot simply ignore your prior obligations and send all of your money to your student loan provider. Therefore, you must create a budget for yourself and determine how much money to allocate to all of your necessities and bills.
Lastly, you will learn more about time management and how important it is to pay your bills on time. If you are not in the habit of making payments, you will be able to work towards incorporating the responsibility into your schedule.
One of the biggest responsibilities you will learn is when you run into a situation where you do not have a standard or full paycheck, due to time off, and you still have to meet your monthly obligations. This will teach you how to manage your time and money efficiently.
How to Apply the Money You Earn to Your Student Loans
Once you have earned money from your job or the work study program, you will be able to start apply it to your student loans. You should apply as much of the money as you can towards your student loans, as this will help you save thousands of dollars in interest AND you will end up owing less in the long run, as your principal balance is calculated once you graduate college, leave, or drop below part-time.
Remember, the more you pay now, the less you will owe later on once you do graduate. After you have graduated, you will be able to evaluate the amount of money you owe and you will have the opportunity to sign up for different payment plans such as the income-based repayment plan.
One thing you need to keep in mind, no matter what option you choose, is that you should avoid default on your loans at all costs. If you cannot afford the payments on your student loans, talk to your loan servicer immediately to work out a plan that fits within your budget.