Today, students and their parents owe more than $1.76 trillion in student loan debt and the average balance, including both federal and private student loans, may be as high as $40,499.[1]

When it comes time to take control of these substantial obligations, the old adage is truer than ever: knowledge is power.

PNC’s Harjas Sidhu, Head of Personal and Student Lending, puts it this way: It’s vital that student borrowers understand the source and size of their loans and the anticipated monthly payments. Even though they are not required to make payments during their student years, or during the grace period thereafter, planning should start as soon as the loan is received.”

Here are some tips for managing student debt successfully:

Build a relationship with a financial aid counselor at your school. Although there is a lot of information available from a variety of sources, your financial aid counselor can help you translate that information in a way that is helpful in your specific situation. Contact your institution’s financial aid office to connect with a representative who can help you navigate the financial aid process.  These representatives typically welcome the opportunity to work with students and parents.

Understand the source of the funding and required payment terms. You don’t have to pay back scholarships or grants, but a loan requires repayment, plus interest. You may have a combination of these types of funds. Your institution’s financial aid counselor can help you sort out what this will mean for your obligations after graduation. Depending on the loan, you might even be able to find information on making payments while still in school, reducing your balance after graduation.

Balance the income potential of your preferred career path with the cost of college and loans. Wages have not kept pace with the cost of college, which has grown 188% since 1998. Wages have increased by only 26% in the same period.[2]

You may not need to diverge too far from your preferred career path, but it may be beneficial to evaluate similar majors and less expensive schools if the numbers don’t add up for you.

Figure the total costs of school. Although costs generally increase as each new term comes around, you should be able to estimate the total cost of tuition, room and board, and other expenses at your chosen institution. Keep track of how much you borrow as  your education progresses.

Calculate your payments ahead of time. Many institutions, such as PNC and the federal government, offer online calculators at no charge to you estimate. Take advantage of these tools as you determine your budget and plan ahead for repaying your loans.

Apply for scholarships: Sidhu emphasizes, “It should cost you nothing but time to research and apply for scholarships. Scholarships can reduce your educational expenses, in turn lowering the total of your loans and interest.” More detailed information to help you find appropriate scholarships is available from PNC.

Here are some additional resources that can help you discover scholarships that have the potential to reduce the cost of your college education:[3]

  • Your financial aid office
  • Your high school
  • Federal TRIO Programs designed to identify and provide services for individuals from disadvantaged backgrounds
  • The U.S. Department of Labor’s FREE scholarship search tool
  • Your state’s grant agency
  • Your library’s reference section
  • Foundations, religious or community organizations, local businesses, or civic groups
  • Organizations (including professional associations) related to your field of interest
  • Ethnicity-based organizations
  • Your employer or your parents’ employers

Understand the role of your loan servicer or lender. If you have federal student loans, your loan servicer serves as a middleman between you and the federal government. They will send you monthly bills, maintain records, forward your payments, and follow up if you fall behind. In some cases, your servicer can work with you to modify your payment plan if your payments become unmanageable.

Do your homework. “There are many free college planning, budgeting tools and resources that can guide you through the financial aid and borrowing process to help you manage your loans and payments. Be sure to take full advantage of this support,” Sidhu concludes.

Reduce the stress that can come with paying for school. Learn more about starting your college payment strategy.