Borrowing Responsibly

Your decision to borrow money to finance your education represents a serious investment in your future. You may need to commit a significant portion of your future salary to achieve your current educational objectives. Most students find this commitment well worth making, but it still requires careful consideration of the future implications of your current financial decisions. We encourage you to calculate how much you will need to earn in order to cover your student loan debt. Dealing with this long-term financial obligation can be made easier by using sound debt-management practices—both while you are in school and after you graduate.

Ways to Reduce Your Costs

Estimate your expenses by creating a budget. Compare your budget to the Cost of Attendance (COA) and trim your expenses as necessary. Also, calculate the monthly amount of your loan payments to estimate your financial obligation. Some suggestions for reducing your costs are listed below.

  • Take public transportation instead of owning a car or, better yet, rent an apartment near campus so you can bike or walk to class. You will save on parking, gas, repair, and insurance.
  • Eliminate outstanding credit card debt before coming to school. We are unable to increase your cost of attendance to accommodate this debt.
  • Instead of a credit card, get an ATM debit card so as to deduct the money automatically from your checking account.
  • Cut monthly rent expenses. Share living expenses with a roommate or find an apartment that rents for less than the $970 rent allowance.
  • Go without amenities such as cable television, pagers, and cell phones, or reduce service.
  • Buy previously owned instead of new furniture.
  • Delay pet ownership. In addition to food and health care, you often must pay more for an apartment that allows pets.
  • Once you have settled into an apartment, try not to move again. Before occupying a new apartment you often must pay a first and last month’s rent plus security deposit, and there are many expenses associated with moving.
  • Take advantage of the array of free and inexpensive entertainment available on campus (e.g., plays, concerts, clubs, gyms, Doc Films).
  • Buy used books whenever possible or borrow books from friends or a library.
  • Dine out in restaurants as seldom as possible.
  • Use gifts and tax refunds to help pay school expenses.

Estimate Your Expenses

Making responsible borrowing choices require an overall knowledge of the total cost of your education and reasonable estimations of the expenses you are likely to incur while you are in school. The total cost of your education is made up of direct costs and indirect costs for one academic year. Direct costs are those associated with your enrollment in a graduate division or professional school (e.g., tuition and lab fees). Indirect costs are those expenses necessary to maintain a “modest but adequate” standard of living while attending school.

The majority of indirect costs are covered under the living expenses portion of the total COA. However if your indirect costs exceed the allowance in the cost of attendance, you will need to adjust other expenses downward to meet your indirect costs.