Office of Student Aid : Loans : Managing Your Loan Debt

Most Penn State students and their families heavily rely on educational loans to finance their degree. In fact, 80% of all undergraduate students who apply for student financial aid receive educational loans for assistance, possibly in combination with other aid programs (for students with the highest financial need).

The debt you incur while completing a college education is an investment in your future. However, you need to carefully consider the decision to borrow money. Please review the following proactive steps you can take to effectively manage your educational loan debt.

• Determine exactly how much you need to borrow in order to help finance your education costs and apply for only what you need. You do not have to borrow the maximum the lender will allow.
• Be aware of how much loan debt you can adequately manage after you leave school. Consider how much you may need to borrow in future years and calculate an estimate of your total student loan debt upon graduation. Note: This is for planning purposes. Keep in mind that you will need to apply for loans on an annual basis.
• Use the estimate of your total student loan debt to determine your estimated monthly payments and recommended annual salary.
• Deduct the interest paid on "qualified" education loans on your tax return. You may want to talk with an experienced tax consultant about Hope Scholarship and Lifetime Learning Tax Credit Programs before you file your income tax return.