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Ouachita Stories


Paying for college: 5 sensible borrowing tips

Students on graduation dayJanuary 27, 2020

With the growing cost of a college education in today’s world, it’s no wonder that students and parents are concerned about how to pay for it.

But the reality is that most people who attend college in the United States borrow money in order to pay for it. Based on findings in 2019, 66% of students who attended a public college graduated with student loan debt, and 75% of borrowers who graduated from private colleges acquired student loan debt.*

Like most big purchases in America nowadays, a college education requires paying – for some of it, at least – with credit. Even though it is “the norm” to take out student loans, you can make sensible decisions that will prevent a crisis in your life post-college.

While student loans are a useful tool, Ouachita Baptist University strongly encourages all students to borrow responsibly. Here are some smart borrowing tips:

  1. Know the difference between subsidized and unsubsidized student loans. Subsidized student loans are loans that the government is paying the interest while in school. Unsubsidized student loans are loans that immediately begin to grow interest. Unable to avoid borrowing unsubsidized loans? Here’s a smart move: If you are able to make even small payments on the accruing interest while you are in school, this will prevent a larger balance (and more payments) when you graduate.
  2. Borrow as little as possible to cover costs, and only borrow what is needed for education-related expenses. Also, consider applying for non-tuition scholarships, even if they appear to be a small amount ($100, $250 or $500). Scholarships can help you cover the costs of books, lab fees, etc., for the semester, or perhaps even for the year. Every bit helps and means less to borrow, and pay back, later.
  3. Be aware of your total loan costs, which is the amount it will cost to repay the principal amount borrowed, plus the accrued interest. You might be taking out reasonably-sized loans now – but that’s before you’ve factored the interest rate. If choosing between two different loan amounts and loan providers, consider the interest rate percentage. It could be costly!
  4. Consider your estimated monthly payments, and don’t borrow more than you can reasonably afford to repay each month. Students and parents can access their loan information at NSLDS.ed.gov. To learn about repayment choices and work out your federal loan monthly payment, go to: www.studentaid.ed.gov/sa/repay-loans/understand/plans.
  5. When you take out a student loan, you are entering a binding contract. Defaulting on student loan debt can negatively impact your credit and even your ability to get a job. Most government loans have a six-month grace period before you have to begin repaying your loans. During this time, you could begin budgeting as if you are paying your monthly loan payment, but saving the money before you are actually in repayment. This could put you several months ahead of schedule in your repayment plan or give you a safety net if it’s hard to make a payment one month. Life happens!

If you are unable to afford your monthly loan payment, contact your loan servicer immediately to discuss other repayment options. For additional information on payment plans, loan forgiveness and consolidating, go to: www.studentaid.ed.gov.


By Ouachita’s Office of Student Financial Services. Visit their webpage for more helpful financial information. 


*Friedman, Zach. “Student Loan Debt Statistics in 2019: A $1.5 Trillion Crisis.” Feb. 25, 2019. Forbes.