How to Pay Down Your Student Loan to Zero

If you read my eHow article How to Get Free Money for College, it entailed an enormous amount of information. If you are already in college and qualified for the Pell grant or State grants, these steps break it down for you. Having student loan debt is no fun. It can improve your credit or ruin it. Take advantage of how federal money is handled at your school' s financial aid office. Read How to Pay Down Your Student Loan to Zero
for more information. Or, for translation purposes, choose your language using the Google Translate tool on the right column to read below:

1)
After your first day at school, the clock is ticking. Based on what you qualified for in student loans or grants, your financial aid office has to wait 30 days to process your loan funding into your account.

2)
Your student loan and grant disbursements will be posted to your account in increments. Disbursements are based on your school terms or semesters. Typically, right at the time your term or semester begins, monies are in your account already.

3)
Keep in mind, your tuition is also being posted as well. Your tuition can be charged upfront, by term or semesters. Let's say your total tuition is $28,000 and there are four terms. In your first term, $7,000 is charged to your account.

4)
Let's say you qualified for grants, scholarships and Stafford loans, this is what your first term disbursement would like:

Pell grant -$2,515; Subsidized loan -$2,200; and Unsubsidized loan -$1,600; Scholarships -$1,000; State grant -$735 = -$8,050 total

5)
Term tuition charge $7,000 - $8,050 disbursements = -$1,050 credit
Your financial aid office will mail you a stipend check for $1,050!

6)
Now, you open up the envelope and you think you just won the lottery -- WRONG! You still owe the government money! Immediately, take this check back to your financial aid office, and tell them you want to reduce your student loan balance. Do this every time you receive a stipend check, do not spend it!

7)
Financial aid will do two things; take the check back and refund your loan amount, or tell you to deposit the check in your bank account and write out a payment check to your student loan lender. Doing this requires discipline. If you're not disciplined, take the check back as soon as you receive it. Holding on to it will doom you to heavy loan debt. Remember, temptation is your enemy!

8)
Return the stipend check every time you receive it, and you will be able to reduce your federal loan down to nothing. Even if you end up with a small loan balance, this could give you really good credit if you make on-time payments each month. Your student loan will be paid off in a matter of a few months.