DETERMINE HOW MUCH TO BORROW

When taking out private student loans, it's important to borrow only what you truly need and can reasonably afford to pay back. Private loans tend to have higher interest rates and less flexible repayment options than federal student loans. To assist you in determining how much you need to borrow, use the CAFE planning sheet to estimate gaps of funding each term/academic year for your direct expenses (things charged to your OSU bill).

Steps to Take for Each Term in an Academic Year

Calculate Your Expected Bill: This usually includes tuition, fees, and room and board if you live on-campus. Your school's financial aid office can provide you with an estimated cost of attendance, though we encourage you to find your school’s tuition and fee calculators or charts to find more exact information. For OSU students, use the Tuition and Fees Calculator.
Subtract Any Free Aid You're Receiving: This includes grants and scholarships from your school, and any money you have saved, or your family can contribute.

Subtract the Maximum Federal Student Loans You Can Take Out: Exhaust your eligibility for federal direct subsidized and unsubsidized loans before turning to private loans.

The Remaining Amount is What You May Need in Private Loans: Only borrow what is absolutely necessary to cover your education costs after exhausting other funding sources.

For living expenses, consider working a job to help pay for those if possible. When deciding on how much to borrow, you can estimate things like food and housing (if outside of your bill as you may be living off-campus), books, course materials, supplies, and equipment, personal and transportation and estimate what you would need to help cover those costs. Think about it for each term and for a full academic year.

Keep in mind that any amount you borrow in private loans, you will have to pay back with interest. Borrow as little as possible to minimize your debt burden after graduation. Your future self will thank you!

Speaking of your future self, to avoid borrowing more than you can repay, consider these steps:

Use Bureau of Labor Statistics’ website to research your salary. You can even use Nerd Wallet’s article to get an idea of what your federal income tax might be. Then, use Nerd Wallet’s article to estimate your state income tax (if it exists) for the state in which you would want to live. Finally, subtract all the taxes from your salary and indicate your estimated net income.
Use this Cost of Living Calculator to determine the cost of living where you want to live in the future, compared to what your cost of living is now.
Based on where you want to live, research housing options you might take on and consider things like annual rent/mortgage cost, annual utility cost.
Estimate annual expenses for life after graduation in categories such as: housing, fixed bills, food, transportation, personal expenses, etc. Subtract that from your estimated net salary.
Use Bankrate’s Student Loan Calculator to assess the different repayment terms you are considering.
Ask yourself, can I afford this payment each month?

Activity Instructions

On the Private Loan Worksheet, see the OSU Bill Breakdown as a guide to figuring out what you might need to borrow for direct expenses. Consider using the CAFE worksheet here for a more comprehensive assessment.

Scroll to the next page and learn about the application, certification, payment, and repayment preparation.

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