Keep the change. That’s what it seemed the Department of Education wanted me to do with my loan refunds. After all, I had worked hard to get scholarships and grants to front my tuition, so all I needed help with was my living expenses.
How much does it cost to live? I requested the maximum amount I could—$10,000. I figured that should be sufficient to cover my living expenses, but it was actually more than enough. So I was left with a refund. But that word “refund” is kind of a misnomer (That’s an SAT word; look it up!).
Yes, you get the money back, but you still owe it to the people who lent it to you in the first place. So the smart thing to do would be to use the refund to cut down your debt balance.
Or, for those of us who learned by mistake, you could use it to supplement your living expenses, maybe buy a few dinners or even a new pair of jeans. These are all clearly living expenses—albeit a bit more loosely defined.
Now, instead of owing $7,500 plus interest, you owe $10,000 plus interest. Dumb move. No one ever told me I could and should only ask for what I needed. So, here’s some free financial advice.
Don’t borrow more than you need. It adds up quickly, so be an educated consumer and spend your loans wisely.
Enid Arbelo Bryant is a freelance writer in Rochester, New York. Her mistakes are your good fortune, as she recalls her college years and what she wishes she knew then.