Student Loan and Grants:

10 Questions to Ask Yourself During Any Economic Crisis

With all the financial mess that has gone on, you might wonder how stable your student loan and grants are. You can find yourself in a money bind anytime, not just during a recession.

Let’s take a few minutes and look at where you are, and what you can do to stay afloat. You’ll find 10 questions to help you evaluate your situation.





Banks and Gov’t Still Giving Student Loan and Grants

First, hundreds of banks have student loan programs. The current morass in the economy, while troubling and problematic, won’t prevent many banks from making student loans.

The federal student loan fund has continued making loans during recessions in the past, and I expect that to continue. Some senators and representatives have spoken up on this point, to make sure students can still borrow and get their grants.

10 Questions About Your Student Loan and Grants

Recently, I received a cautionary email from a close friend. The email included sort of a quick checklist of my personal economy. I have expanded those questions for you on your student loan and grants. Dive in.

1. Where does your money come from?
How much of your money for the school year comes from a student loan, and grants, or a job? (Or a trust fund, if you are lucky ;) I said above that using student loans and grants will live on, but you may not find as many. Grants, for example, Pell grants, will continue for the foreseeable future.

2. How secure is your job and income?
Take a minute to think about where you work. Some businesses will grow during any recession – they usually sell substitute goods. For example, buying hamburger instead of steak, and repairing your car instead of buying new happens more in a recession.



Also, some things sell when others don’t, often called recession proof. Lipstick falls in this category – when a woman can’t go to the spa, or can’t afford some expensive clothes, she can still buy a lipstick.

And of course, you have the basics. Everyone will still eat; still heat their homes, and so on. The economy in your area has a long list of basics. People will still go out to eat, but they may not spend as much on a meal.

So, is your job in one of these categories?

If not, don’t panic. You need to consider how long you have been there, if your company values you, (will you go first or last in a crisis?) Having an income is better than not, and if you perform your job well, you might have a good opportunity in your current position.

3. How much cash do you have lying around, or in an account?
Savings – not so common for college students, but you might have some. Everyone needs a rainy day fund, some money stashed away for the future.

Again, if you don’t have a bunch of zeros on the end of your savings account, don’t panic, but you should start saving now. Don't count your student loan or grants as savings unless you have put them in a savings account!

4. Who wants to take a bite out of you?
Think about your obligations. Do you have a credit card? Two? How much do you owe? Can you pay them off quickly?

The more you operate on cash, the better. If you can pay off a credit card now, and still keep yourself afloat with all your other obligations, you should do it. That’s a general statement – you will have to decide for yourself and your situation. Typically, you’ll find being out of debt helps keep your budget balanced, and keeps you free.

More suggestions on how to reduce credit card debt.

I wouldn’t suggest burying your money in the backyard or putting it under your mattress. Coffee cans get lost and rust and leak. Bugs can eat paper under your mattress. These ideas don’t keep your money safer than in a bank as far as I can tell.

Especially student loan and grants - use those for tuition.

I heard that Suze Orman’s doorman took his money out of the bank and then was robbed…that’s a crying shame. He has no recourse except to find the thief. A good bank will have federally insured deposits. That is still the safest place to put your money.

Pay off any debts you can. Reduce the money you have to send out every month if possible without extending debts. A student loan and grants can help here. Spend only what you have for each month, don’t take out any new loans (student loans being the exception, to pay tuition, rent, and maybe a little dating ;)

5. How long can you last?
All right, let’s wrap up the hard questions. This one gets to the point: Can you make it through your economic problem? Or, can you see a major obstacle already?

If you have lost a house, or are in the process, I feel for you. Can you sell or renegotiate? I know lots of people owe more than their house value. They either choose to stay put, or take the loss.

Some students may have problems qualifying for a student loan and grants. Remember, you can file without your parents if you have passed the date on the FAFSA. This may free up some money for you.

6. Can you keep going to school? Maybe even Grad School?
Keep things real. If you keep your funding and/or a job, you can probably finish school. Maybe you need to take more classes at night or during summer next year – but you can finish.

In another recession, I saw 40% of a graduating class go on to grad school because of a lack of jobs. You might consider it. If you go, you should finish, not just pass the time.

And student loans and grants can definitely help here.

Time to lighten this up a bit. Too gloomy :(

7. Do you have a good supply of cold cereal and chips?
Not a bad idea to keep the pantry filled. And if you have some of the favorites, your friends can come and stay a while…won’t that be fun?

Another good item to have in troubled times: Chocolate. Lots of chocolate. I’m not saying anything about trading value; I just mean chocolate is really good when you have a lousy day :)

8. As long as we’re talking about you, do you have a soft couch, and an extra pillow?
Seriously! If you have a stable student loan and grants, a nice apartment, your place may end up a haven for others with, shall we say, lackluster planning capability? Budget deficits. Cash shortages, and so on.

Okay, just wanted to let you know that others may find you incredibly attractive during a recession. This could really vault your dating life over past levels. Cook a few turkeys, barbecue some ribs or chicken, then leave the windows open so others with a cupboard full of ramen noodles can smell it.

9. Have you considered changing your major?
Times like these make you consider what you are going to for work. That job in recreation management may not sound so great right at the moment.

I’m laughing as I write this, but take a minute to think about your future. You are going to work for a long time, do something you really like. The economy eventually will rebound and you might feel stuck in that field if you change in the heat of the recession.

By the way, if you do feel stuck, make a change. I did, and I’ve never regretted it. You can make an opportunity for yourself and move to a better place for your career.

And if you want to go back to school after being out for a while, a student loan and grants can help. Take a look at this page with several ways to pay for school and here's a page with low cost college credit ideas.

10. In case you aren’t the person in #7 and 8, ask yourself who do you know that plans better than you? :(
Maybe you should go to their house and see if they have your favorite cereal and those great chips you love. Do yourself a favor, though. Take some dip or a half gallon of cold milk. Bring Oreos – everybody loves those.

Try not to let them see your luggage until after you share your stuff. :/

If the semester is fast approaching and you need college books, one option is to apply for a student loan to get money fast.

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