If you will be sending the kids in your life off to college next year, then you are probably getting ready to file the Free Application for Federal Student Aid (FAFSA®) form next week. According to their website, submitting the FAFSA form gives applicants “access to the largest source of financial aid to help pay for college or career school,” and will help schools determine how much financial aid will be available to you. Even though you will not know right away exactly how much aid you will receive from various loans, grants and other sources, it’s a good idea to take some time to speak with the kids in your life about a student loan repayment plan now. Here are 3 topics to discuss to help prepare them for student loan repayment.
Starting a savings plan now will help them in the future.
If the college-bound student in your life doesn’t already have a savings account, now is the right time to get one started. Even if your student is paying rent to live off campus, this will likely be the least financially taxing time in their life. Encouraging positive money habits today, such as saving and budgeting, will help them on their way to a strong financial future. And the money they save today can give them a head start on student loan repayment a few years down the road.
Teach your student how to budget in college.
Living away from home for the first time offers plenty of lessons for college students. One lesson that is often overlooked is how to budget in college. While they’re probably not fully independent quite yet, your college student is experiencing a new level of financial freedom without you there to advise them on what to buy and when. Instilling in them some basic budgeting strategies will come in handy not just on campus but well after graduation when it comes time to start their student loan repayment plan.
Get familiar with your student loan repayment options.
As you await feedback from FAFSA regarding your financial aid, take some time to get familiar with your future loan repayment options. For example, did you know that there is often a six-month grace period before your student must start repaying their loans? There are also helpful tools available such as student loan repayment calculators to help meet payoff goals. When it comes time for your student to begin looking for their first job after college, there are companies that can offer loan assistance to their employees. Keeping these options in mind can help ease the stress of future student loan repayment planning.
It may feel like a lot of time and many steps stand between you and sending your student off to college, but you will likely find that the coming year flies by. Getting prepared ahead of time can help your student find their financial footing and get off to a strong start after graduation.
For more tips on saving and budgeting for college, visit the FutureTrack blog, then schedule an appointment for your complimentary planning session.