College is an exciting time of transition and growth. Along with new classes, roommates, and responsibilities, you also have the opportunity to lay the foundation for your financial life.
But where should you start? Read on to learn more about key financial topics such as how to pay for your education, manage debt, and build your savings.
How to Pay for College
The cost of college can feel overwhelming, but there are a few avenues you can explore to help fund your education. A key step each year is completing the Free Application for Federal Student Aid (FAFSA) as early as possible. This helps determine your eligibility for grants, federal student loans, work‑study, and state and school aid.
Once you know your eligibility, consider applying for grants and scholarships. Grants are usually based on financial need and don’t need to be repaid. Scholarships can be awarded for academics, activities, community service, background, or specific interests, and also don’t need to be repaid.
Look beyond your college’s financial aid page. Community organizations, local foundations, nonprofits, and professional associations often offer scholarships. Great Lakes Credit Union, for example, runs an annual scholarship program for its members.
Work and savings can also lower your total cost. Part‑time jobs, internships, and work‑study programs can help cover everyday expenses. Even small amounts set aside for books, housing, or transportation can add up and help you avoid last‑minute borrowing.
If you need to borrow, review federal student loans before assessing private loans. Federal loans often have fixed interest rates, income‑driven repayment options, and hardship protections like deferment or forbearance.
Private loans from banks or other lenders can fill gaps but are generally best used after you’ve explored grants, scholarships, work, savings, and federal aid.
To keep borrowing in check, consider your future earning potential. A common guideline is to keep your total student loan balance at or below what you reasonably expect to earn in your first year after graduation.
How to Start Building Credit
Think of your credit report as a financial report card. Lenders, landlords, and sometimes employers use it to see how reliably you handle money. Key factors include:
- Payment history: Whether you pay on time
- Credit utilization: How much of your available credit you use
- Length of credit history: How long your accounts have been open
- Credit mix: Types of accounts you have (credit cards, loans)
- New credit: Your recent applications for credit
In college, beginner‑friendly tools can help you build credit. A secured credit card, where you put down a deposit that becomes your credit limit, can help you build a record of on‑time payments. A credit builder loan can help you achieve something similar while also allowing you to save.
Whatever method you use, an important habit to build is paying your balance on time. In the case of a credit card, paying off your balance in full each month saves you from having to pay interest on your purchases.
Try to keep your balances low relative to your limit — ideally using no more than 30% of your available credit. Additionally, avoid opening too many new accounts in a short period.
Bank Accounts 101: Checking vs. Savings
Building a solid banking foundation is a key step to achieving financial success and stability. Checking and savings accounts are two common bank accounts that you can use to establish yourself financially.
A checking account is for everyday money management. You can use your checking account to pay for everyday expenses with your debit card, such as rent, groceries, and gas.
A savings account is for money you want to keep and grow, not spend right away. It typically earns interest and is useful for an emergency fund or short‑term goals like books, travel, or security deposits.
During college, consider depositing money into your checking account to cover regular expenses, and then set up automatic transfers to your savings account.
Paying Off Debt
Managing and paying off debt are important skills to learn. The key is to stay organized and intentional. Start by creating a list of each debt with its balance, interest rate, minimum payment, and due date.
Adopting a payoff strategy can help you pay off debt faster. Here are a few popular payoff strategies:
- Snowball: Focus extra payments on your smallest balance for quick wins.
- Avalanche: Focus extra payments on the highest‑interest debt to save the most money.
Avoid taking on new high‑cost debt while you’re paying down what you owe. Be especially careful with credit card spending, buy‑now‑pay‑later offers, and high‑interest loans, as these options can be expensive.
Bringing It All Together
As a college student, you’re already investing in your future. Building healthy financial habits now — using checking and savings accounts wisely, establishing credit slowly and responsibly, managing debt with a clear plan, and approaching the cost of college strategically — can reduce stress later and give you more choices after graduation.
You don’t need to master everything at once. Take your journey one step at a time, like opening a savings account or creating a simple payoff plan. Small, consistent actions now can make a big difference over time.
Looking to get some extra funds to pay for college? Check out GLCU’s scholarship program.
The information in this post is for educational and informational purposes only and does not constitute investment or financial advice. You should consult a licensed financial advisor before investing in any financial product or service.
