Financial Aid: How Much Should You Borrow?

A high-quality training program or degree can boost your chances of landing and moving up in your dream career. Many students consider using student loans as part of a financial aid package to help fund the expenses of higher education. The most difficult aspect of borrowing is the terminology and the wide range of products available. Developing a budget and locking in a low interest rate for loans are some of the most important aspects of financial aid planning. There are also additional requirements to consider when borrowing funds.

Evaluate Availability

There are several private and federal student loan options available today. Your school will usually provide a sample financial aid package to choose from after acceptance. Students will need to fill out the free application for financial aid before March of the acceptance year. This will give a clearer idea of available borrowing power. Need-based loans such as Perkins Loans usually have lower interest rates and can be discharged after working in a public high-needs job after a specific number of years.

Training Specific Expenses

In addition to tuition, some programs may require additional equipment or training materials beyond textbooks. For example, a Physician Assistant or Registered Nursing program may require you to purchase a stethoscope and materials to study anatomy. Many graphic design or computer science majors are required to purchase higher end software for practice in their studies. You should take these costs into consideration when considering financial aid. Most of this equipment can be used later in your career as part of an initial investment.

Universities will have specific requirements for disbursements and processing financial aid. Schools such as Rocky Mountain University of Health Professions offer full federal financial aid using a virtual financial aid office in several health science programs.

Develop a Budget

Developing a budget is a lifelong habit that can help you engage well with your money. Most education programs allow you to modify an existing financial aid packages to suit your needs. As a result, you may need to consider if it's necessary to finance all of your education or combine financing with your own payments. Develop a plan that looks at the long-term costs associated with student loans and immediate paybacks. Paying for your entire education out of pocket may seem frugal, but many programs such as the health sciences require a considerable amount of time to complete a program.

Craft your budget with the following in mind:

• Available payment plan options and their amounts after graduation.

• Discharge requirements.

• Potential starting and median salaries for specific professions in your local area.

Leveraging Financial Aid

A financial aid package can still be accepted even if you have the funds to pay for education expenses out of pocket. In fact, it can be a good leveraging tool while paying for expenses under a full academic load. There are two types of student loan interest rate programs. Subsidized student loans have interest paid by the government while in school and unsubsidized loans accrue interest while in school. You can take advantage of unsubsidized loans by borrowing for all necessary education expenses and paying the loan considerably down before school ends. The result is an interest free temporary loan that can also help build your credit. You will need to be careful with this method and consider your budget ahead of time before going forward.

The financial aid process may seem tricky. However, financial aid packages can be changed according to your own needs. The biggest determining factors for financial aid borrowing are the full cost of education and potential salary after graduation. You may also want to consider the time it will take to complete a program. Following these guidelines will help craft a good financial aid package for the duration of your time at school as well as after.


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Rachelle Wilber

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