Keeping an Eye on Your Student Loan Account

Your student loan account holds the funds from your lender until they are allocated toward given expenses. Some accounts will only be applicable toward education-related expenses. For example, federal loans are distributed into accounts directly with a university for tuition costs. Other accounts may be used to service day-to-day living needs. It is essential to monitor the balance of an account that is not specifically allocated from the beginning.

  • Most student accounts have auto debit options to pay for living expenses. This means your rent, dining expenses or even rooming expenses will be deducted directly. Without monitoring your balance, one of these payments could "bounce," and you will have a heft finance charge.
  • You may find you have more funds than you need in your account on a term-by-term basis. You are paying interest rates on those loan funds, so having too much money left over is essentially a waste. Tracking your balance can give you an idea of how much you actually need in order to cut back on your overall debt.
  • Student debt is one of the first major debts most individuals incur. The way you manage the debt will set up the beginning of your credit score, and this score will be essential in helping you afford a car, house and other expenses later in life.

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