Student Loans 101

by Alyssa Schneider, Educational Lending Specialist II

If student loans make you groan, you’re not alone. We can help.

Student loans don’t have to be complicated — we’re here to empower you to make the most of them. 

Start with the FAFSA

Everyone, whether you think you’re eligible for funding or not, should fill out a FAFSA form every year. The FAFSA will go live in December for the 2024-2025 academic year.

Need help filling out the FAFSA? Start here.

Plan for Funds Available

Once you’ve completed the FAFSA form, you will have an idea of what scholarships, grants and federal aid is available to you. Take advantage of these offers, using private loans to fill the gap.

Only borrow what you need for academic expenses. Don’t borrow extra for “spending” money because that will have to be paid back with interest.

Be aware of loan limits and plan accordingly. The federal government and most private lenders limit the total amount that can be borrowed in a student’s lifetime.

Know Your Deadlines

Apply for aid at least a month before you need it. Many lenders, and especially the federal government, need time to process applications. Don’t wait until the last minute!

Take Your Time

Give yourself enough time to read through the documents you receive when applying for loans. Ask questions if you have them!

Get Acquainted with Interest

Understand how the interest works on your loan. Think about:

• fixed vs. variable rates
• when/how interest accrues
• how repayment works (ex: will payments go to interest first and then principal?)

Try to avoid private loans with compounding interest as it’s hard to keep up and pay on the principal.

Start Paying Your Interest Right Now

Make interest payments on your student loans while you’re in school. Even just $25 a month can make repaying student loans after graduation more manageable.

Also, once in repayment mode, try to pay extra whenever possible to get ahead of interest.

Build Credit

Start building your credit early and safely. Many students want to refinance loans after graduation but don’t meet the credit history requirements since they’ve only had student loans. Taking out a reserve line of credit or a student credit card, like UW Credit Union offers, is a safe and effective way to build healthy credit.

Your journey as a student will be full of milestones and transitions. Student loans are an option to cut the stress out of paying for college. With good planning and preparation, you can make student loans work for you.

If you still have questions, we can help.

UW Credit Union is committed to providing financial education, helping our members and communities build their financial savviness to make empowered decisions. We offer free learning seminars, confidential credit consultations and, through our partnership with Banzai, an impressive catalog of financial education resources.

Here for every you.