Being a college athlete can be challenging when it comes to balancing all your responsibilities. One of the most important of which is juggling money, especially student loans. Worry no more – LRT Sports is here with the student loans survival guide! Listed below are common terms used when working on student loans and some advice on how to approach them.
Student loans: Loans offered to college students to help temporarily pay for expenses such as room, board, tuition, and additional supply costs.
Interest: The cost accrued overtime until loans are paid back in full.
Variable Interest Rate: A rate that can change periodically, but typically changes on a yearly basis.
Fixed Interest Rate: Interest rate that remains unchanged throughout the time it takes you to pay back the loan.
Subsidized Loans: A type of federal loan where the interest is waived for the time that you’re in school, meaning you don’t have to worry about the payment increasing overtime until you’re out of school.
Pro Tip: Have a plan when it comes to paying back your loans. You don’t want to be in a situation where you borrowed more than you can pay back. The general rule of thumb is to not take out more loans than you plan to make in your first year of working.
Unsubsidized Loans: A type of federal loan where the interest is not forgiven at any point and can accrue while you’re in school.
Private Loans: Loans made by a private organization, like banks, credit unions, and state-affiliated organizations.
Grace Period: The time between when you finish school and when you start to make payments on your loans. This time varies depending on which loan you get but is usually around 6 months.
Grants/Scholarships: Unlike loans, grants and scholarships are financial awards that do not have to be repaid and do not accrue interest. Grants and scholarships are unique, and can be awarded for a variety of reasons.
Pro Tip: Not all college athletes get athletic scholarships, and most athletic scholarships don’t cover the athlete’s needs, so make sure you apply for grants and scholarships outside of your sport as well!
Related: Shortfalls of Athletic Scholarships
Pell Grant: Grant given by the U.S. Department of Education to a student on a need basis.
Financial Aid: Any money given to help one pay for college or educational expenses.
NIL: This acronym represents an athlete’s ability to profit of their own name, image, and likeness. This is a new way for athletes to supplement their income while in school. Like grants and scholarships, NIL profits are based on an agreement between an athlete and a company, and therefore do not need repaid.
Pro Tip: In order to find out if you qualify for student loans and financial aid, contact your financial advisor at your school to help guide you through the process, and apply for the FAFSA.
Related: FAFSA: What You Need to Know