Usually, close to the new semester beginning, students get the loan refund checks. They are issued for the amount which remained from the federal loan after all university costs have been paid. Sometimes the sum reaches thousands of dollars and the student is free to spend it for whatever he wishes.
Unfortunately, the individuals getting such refund often fail to remember that this money is just a part of their loan and one day the payment will come due. Most graduates regret later on the way they spent the received refund.
Taking into consideration the growth of student loan amount in recent years and potential risks connected with it, pay your attention to the 3 most common mistakes students should avoid in dealing with their refunded means.
1. Considering The Refund Check Free Money
Bear in mind that the amount you get is a loan and should be covered one day, but it’s not at all free means to spare. The best solution will be to consult financial aid officer and discuss future loan costs.
Avoid spending your money for entertainment or holidays and travels, as it will be the same as taking a loan for package vacation.
2. Not Budgeting From The Very Beginning
Every student should make a budget beginning of each semester and spend the money received on student loan refund check for such college expenses as textbooks, or other basic needs for studies. Some students refinance loans to get better repayment terms. Many colleges have money management or financial aid offices to provide help to students in such aspects.
It’s better to save money in every possible way. You can always ask for advice from the older students how to better budget for college activities or eating out. Living on campus will definitely help to avoid driving expenses; textbooks can also be purchased from older students and will cost you much less than the new ones.
3. Skipping Part-Time Jobs Covering Expenses with Loan Refund
The primary aim of each college is to make students employable after the graduation. Gaining some working experience while studies is a great plus for every student. You can always start looking for the opportunities in campus career service offices, where the counselors are eager to assist the students in choosing the job helpful in the post- graduation career. Working part time you can always get additional means for trips, entertainment, new gadgets, but never compromise your grades. Estimate carefully the time you need for studies and the time you can spend for a part-time job.
If you manage to save some amount from the student loan refund check, just apply for less loan amount next year or keep it as emergency means for various unexpected costs one may face. Just keep in mind that the refunded money is not free, but should be covered with interests.