Paul Lattibeaudaire Jr. graduated from the University of Central Florida in December 2013 with a Bachelors Degree in General Business. During his time at UCF, Paul has been an active member in numerous organizations such as Alpha Kappa Psi, INROADS, Sales Club, Sports Business Management Club, and has several articles published by the Central Florida Future. Paul currently works for Burger King Corporation as a Sales and Profit Operations Coach.
The moment that I have been dreading for months has finally arrived, repayment of my student loans. Time to pay off that piece of paper that took many of us 4+ years to achieve, or for most of you, on your way to achieving. For those of you who haven’t reached this moment and have some time to prepare yourself here are some quick tips on how to make your debt a little more bearable.
Unsubsidized vs. Subsidized Loans
This concept confused me while in school. I didn’t care whether or not the loan was subsidized or unsubsidized. All I knew was I needed money so I accepted whichever loan helped me pay my bills. Fast forward to the present, I understand why now that wasn’t the best idea. However, through my mistake, I am able to pay it forward and help you understand the differences between loans. Some of the loans that I took out were Unsubsidized. Meaning that I was responsible for paying the interest for borrowing the loan as soon as I took it out in college These loans can easily grow to an insurmountable number by the time you are ready to pay the loan back. I would highly advise against taking out Unsubsidized loans
Subsidized loans give you a little more breathing room. As soon as you withdraw a subsidized loan, the Department of Education pays the interest on the loan until after graduation. Therefore, while you’re in school, you don’t have to worry any added interest on your loans.
In short, do not take out any Unsubsidized loans unless you absolutely have no other means of financial aid.
Know your interest rate!
Each loan that I have borrowed has a different interest rate, usually between 3 and 7 percent. When paying off loans, you want to focus on the loans with the highest interest rate because these are the loans that are going to cost you the most overtime. Interest accrues (increases overtime) on a daily basis until your loan reaches zero. Interest rates on federal loans are listed on:
While in school if you have a loan is accruing interest it is best that you start paying off the interest as soon as possible on those unsubsidized loans before they get out of hand.
Budget your debt!
For many of us, we are thousands of dollars in debt with very little income helping us pay off this debt. However, don’t let what seems insurmountable dollar figure amount frustrate you from making a plan to eventually erase your debt. There are ways that you can budget your debt to eventually get those thousands down to zero.
Prioritize student loans so that you can dedicate at least 20 percent of your income to pay them off. The more money you can put towards the loan, the easier the payment. If you don’t have any income once graduating or are not making enough money to start paying off student loans, the government has a couple of options for you to help which are all listed on the link below:
Finally, be disciplined! Like anything in life, it takes time before you see results. Just stay the course and make those payments on time!