Savanna Hoffman
Paying off student loans can be a challenging endeavour, but with the right strategies, it is possible to manage this debt effectively. USC students have access to various resources to help them navigate their loan repayment journey, including financial aid services and private lending solutions. Understanding the loan repayment process, exploring alternative funding sources, and creating a personalised budget can empower students to take control of their finances and successfully pay off their student loans. This introduction will delve into the key considerations for USC students seeking to manage and repay their student loan debt.
| Characteristics | Values |
|---|---|
| Interest rate | Fixed |
| Prepayment penalty | No |
| Income-to-debt ratio | No |
| Credit check strictness | Less strict than private student loans |
| Co-signer | Allowed |
| Deferment | Allowed while enrolled at least half-time in school, and for up to six months after |
| Forbearance | Allowed under certain circumstances |
| Cancellation | Allowed under certain circumstances |
| Repayment period | 10 years |
| Repayment start | Six months after graduation, withdrawal, or dropping below half-time enrollment |
| Budgeting | Recommended |
| Co-borrower | Allowed |
| Lender | USC Credit Union |
| Loan type | Student loan, line of credit loan |
| Additional services | Student credit cards, free online bill pay |
| Application | Online |
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Create a budget
Paying off student loans requires discipline, perseverance, and a smart budget. Here are some steps to create a budget to help pay off your student loans:
List your debts
Make a comprehensive list of all your debts, including student loans, credit cards, car loans, etc. Include the name of the loan, whether it is federal or private, the outstanding balances, monthly payment and due date, and the current and principal balances. Order the debts from the smallest to the largest balance.
Make minimum payments
Ensure you make the minimum payments on each debt to avoid late fees or penalties. Making the minimum payments on time can also help build your credit history and score.
Allocate extra funds to the smallest debt
Look for any additional funds in your budget that can be directed towards debt repayment. This could include cutting back on discretionary expenses, boosting your income through side gigs, or using money from your emergency fund. Apply these extra funds to the smallest debt on your list.
The snowball effect
Once you pay off the smallest debt, take the entire amount you were using to pay it off (minimum payment plus extra funds) and apply it to the next debt on the list. This creates a snowball effect, where the amount available for each subsequent debt increases.
Track your transactions
Stay on top of your spending by tracking your transactions. You can manually input your receipts or use a budgeting app to automatically track your purchases. This will help you see exactly how much extra money you have to put towards your student loans and give you a sense of control over your finances.
Stick to your budget
Creating a budget is just the first step. You must also have the discipline to stick to it. This may involve sacrificing some discretionary expenses or taking on extra hours at work. However, it is important to remember that budgeting should help you feel more in control of your finances, not overwhelmed. If your budget is too strict and doesn't fit your lifestyle, make adjustments as needed.
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Apply for scholarships
Applying for scholarships is a great way to fund your studies without having to take out loans. Scholarships are typically awarded based on merit, financial need, or both.
Merit-based scholarships
Merit scholarships are awarded to students with special qualifications, such as academic, athletic, or artistic talent. They are also available for students interested in particular fields of study, those actively involved in different cultural communities, or those who live in certain areas. Merit scholarships and need-based financial aid have separate application processes. You can learn more about the need-based financial aid process on the USC Financial Aid website. Students do not need to submit a need-based financial aid application to be considered for a merit scholarship offered by the Office of Admission.
USC administers more than a dozen prestigious scholarship programs awarded based on academic excellence, leadership, service, and talent. These scholarships range in value from a few thousand dollars up to full tuition. To be considered for a USC Merit Scholarship, students must apply for admission to the university by November 1 or December 1, depending on their intended major.
Need-based scholarships
Need-based scholarships are awarded to students who demonstrate financial need. To be considered for need-based scholarships, students must submit a financial aid application. This process is separate from the merit-based scholarship application.
Outside scholarships
Outside scholarships are awarded by organizations outside the Office of Admission, including on-campus offices and alumni groups. These scholarships typically require a separate application and have varying deadlines, eligibility requirements, and award amounts. Some outside scholarships may require an interview as part of the application process. Award amounts for outside scholarships can vary from a few thousand dollars to upwards of $10,000.
Tips for applying for scholarships
- Start your research early: Begin researching scholarship opportunities as early as possible to identify the scholarships that align with your qualifications and interests.
- Follow application instructions carefully: Pay close attention to the application requirements and deadlines for each scholarship. Incomplete or late applications may not be considered.
- Highlight your strengths: When applying for merit-based scholarships, showcase your academic achievements, leadership experiences, community service, and any special talents or skills you possess.
- Demonstrate financial need: If you are applying for need-based scholarships, provide detailed information about your financial situation to demonstrate your need for financial assistance.
- Seek support: Reach out to the financial aid office or scholarship providers if you have any questions or need clarification on the application process.
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Work-study jobs
To be eligible for Federal Work-Study, you must demonstrate financial need through the information provided in your FAFSA application and any supporting documentation. You must also be a U.S. citizen or eligible non-citizen, and enrol in at least 4 units for credit each semester. The program encourages community service work and work related to a student's course of study. Most of these jobs are on campus, but some opportunities are also available with local nonprofit agencies.
Work-study awards range from $500 to $4,750 per year, and you will receive a paycheck from your employer every two weeks. Funds can be used for personal and miscellaneous expenses that are not billed by the university. You can find job openings on Handshake, a service of the USC Career Center, and in the Daily Trojan. Jobs are also advertised on flyers posted around campus.
If you were not awarded work-study, or you need to earn more than the maximum amount permitted, you can look for a non-work-study job on campus, such as through USC Auxiliary Services, the USC Bookstore, or USC Transportation. If you do not intend to use your work-study award, you can request to convert the award into Federal Direct PLUS or private loan eligibility, allowing you to take out a larger loan.
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Co-borrowers
A co-borrower is someone who applies for a loan with you and is equally responsible for ensuring it is repaid. The student loan will be held in your name as the primary borrower, but the co-borrower's name and credit will be tied to the loan as well.
If you are a co-borrower, the loan is your loan just as much as it is the student's loan. This means that you are equally responsible for making payments toward the student loan. It will appear on your credit report and you will receive bills and statements. If the loan payments fall behind, your credit will be affected along with the student's.
If your application for a Graduate PLUS Loan is denied due to an adverse credit history, you may still participate in the PLUS loan program through an approved appeal or approved endorser (co-borrower) application.
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Loan deferment
To request a deferment, students must complete a request form. This can be done by visiting the USC Student Financial Services Office or by submitting a request online. Additionally, students must provide documentation to support their request, such as proof of enrolment or a letter from the university confirming their graduation date.
It is important to note that not all loans are eligible for deferment. For example, Federal Perkins Loans, Health Profession Student Loans, and Loans for Disadvantaged Students have different requirements and may require separate applications for deferment. Moreover, private student loans may have varying policies regarding deferment, so it is essential to review the terms and conditions of your specific loan agreement.
Students with USC student loans can also consider other options for managing their loan payments, such as forbearance or income-driven repayment plans. Forbearance allows students to temporarily stop making payments or reduce their monthly payment amount if they are facing financial difficulties. Income-driven repayment plans set the monthly payment amount based on the borrower's income, which can help make the loan more affordable. It is recommended to explore these options and speak with a financial aid counsellor to determine the best course of action for your individual circumstances.
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Frequently asked questions
You must sign a promissory note before the loan is credited to your student account. Instructions will be sent to your USC email address. You may also need to fill out the Free Application for Federal Student Aid (FAFSA) to secure financial aid.
Your financial need is the difference between the cost of attendance (COA) and how much you and your family can contribute (the Expected Family Contribution or EFC). This is determined by analyzing your family’s financial information.
You can request forbearance from the holder of your loan if you are unable to make payments and do not qualify for deferment. You may also be eligible for a loan deferment or cancellation under certain circumstances.
