Spring is just around the corner, and high school seniors everywhere are buzzing with plans for life after graduation. If college is part of your path, now is the perfect time — whether you’re early or a little late — to start mapping out your next steps.
College is a major investment, and for many students, that means taking on student loans. But borrowing too much can have long-term financial consequences. According to Best Colleges, the average monthly federal student loan payment for a bachelor’s degree on a 10-year repayment plan is around $336, illustrating the importance of borrowing only what you truly need – not just what’s offered.
As you consider the full picture of college costs and what repayment might look like after graduation, here are a few tips for borrowing smarter:
  • Know your total costs – Tuition isn’t the only expense. Factor in housing, food, transportation, books and personal expenses. Subtract any scholarships, grants or work-study income before deciding how much to borrow. Some federal student aid may impact private scholarship funds, so know ahead of time how your financial aid package is created and its impact on you.
  • Do your homework on loan terms – Not all loans are created equal. Before accepting any offer, understand the interest rates, repayment timeline, grace periods, and whether the interest will accrue while you’re in school. Taking the time to compare your options now can save you thousands of dollars later.
  • Keep future income in mind – According to Saving for College, a good rule of thumb is to borrow less than your expected starting salary after graduation. This helps ensure monthly payments will be manageable. Also keep in mind expenses will increase once you finish college, so be sure the student loan payment is affordable.
  • Borrow only what you need – You don’t have to accept the full amount offered in your financial aid package. Use budgeting tools to determine how much is truly necessary to cover costs.
  • Use loan simulators – Online calculators, such as the one from the Federal Student Aid office, can help students understand what repayment might look like and how long it could take based on different loan amounts.
Borrowing wisely and planning ahead sets students up for a stronger financial future. Taking the time now to understand loan options and budgeting carefully can prevent unnecessary debt and make repayment manageable after graduation.

Learn More
For more information on savings for college, student loan options including private student loans available at Iowa State Bank, contact your personal banker at Iowa State Bank.