Perhaps you are moving into an out-of-state college dorm. It can be both nerve-wracking and exciting as well. Dorm life preparation becomes all the more important, especially if you have taken student loans to meet your academic expenses. June 2023 saw U.S. President Joe Biden’s plans for student loan forgiveness were scrapped off by the Supreme Court. As a result, future college students loans being forgiven seem to be remote.
Increased interest rates
Federal student loan interest started to accrue once again since September 2023. Undergraduate students take out direct, unsubsidized, and direct subsidized loans at a rate of NUM0% after July, which is set at NUM1%. Direct, unsubsidized loans meant for graduate students are offered at an interest rate of 7.05%. Those obtaining Direct Plus loans are to pay an 8.05% fixed interest rate.
As you have to repay the principal along with accrued interest, you will need to have in-depth financial literacy to stay afloat. It is just as crucial for you to ensure that the degree you earn is worth the effort and money. Hence, college students should learn a few financial tips. This is vital before moving into college dorms.
7 Financial planning tips for college students
1. Prepare a monthly budget:
Young people should plan their finances right before entering their college dorm. The college’s first year is the better time to do it. You should learn to manage your finances effectively. This includes having in-depth knowledge of your current financial condition. At the same time, prepare a spending or budget plan that is based on real facts and numbers. You can use a free, reliable money management app to know where your money is going.
2. Find paid work:
During college, you can earn extra money that will cover your living costs. Use this income to meet expenses to buy school supplies, college textbooks, and other essential items until you complete your education. Additional funds can also be used to meet college student loan payments during college.
3. College student on-campus jobs:
You can seek on-campus jobs to earn some money. Students can select something that they feel comfortable with and that fits their schedule perfectly. You can talk to your placement counselor to help you get jobs that you can do during your free time. These jobs will help you learn new skills to add to your resume later. It can help you with dorm life preparation.
4. Part-time or freelance work for college students:
You can easily find part-time work at nearby stores or retail outlets. You can even do freelance work if you possess some skills like writing, translation, etc. Such jobs can be temporary or even permanent. You can sharpen your skills further by engaging in these jobs and enhancing your future career prospects.
5. College students lead a frugal life:
You may have a privileged life at home. However, at college, you should consider financial literacy and make life cheap and basic. It becomes all the more essential if you stay in the college dorm and have taken out a loan to pursue your studies. Lead a frugal lifestyle as it helps you combat challenges later in life. Focus on your basics and not on your wants.
6. Build Credit:
During your college years, do not indulge in habits that only rack up long-term debt, especially high-interest credit card ones. Use your credit card wisely to build your credit history. Use various tools and apps to report subscription services, utility bills, and rent payments to the top credit bureaus. Using various tools and apps, I will report subscription services, utility bills, and rent payments to the top credit bureaus.
7. Benefit from the perks you already enjoy:
Fees and tuition fund your college experience. Moreover, it encompasses various items. Benefit from them. Students residing in dorms are provided with college meal plans. It is a wonderful opportunity to avoid financial waste and save precious money. You also learn about money management in the process.
Financial planning is crucial for all college students and should be done before the start of college. With some tips, you can stay debt-free or reduce your debts during college.
