Scholarships are one of the great tools to finance a college education. They don’t have to be paid back and with minimal effort many students can easily find hundreds or even thousands of dollars for school.
Many recent graduates find themselves struggling with student loans. Faced with a serious financial need, many look into the possibility of scholarships for former students. While these post-graduate scholarships would be great, the sad reality is that they are not available. The good news is that there are a number of resources that function like scholarships when it comes to paying off student loans.
Post-Graduate Scholarship Alternatives
Auto-Debit Interest Discount – Nearly every student loan company, including federal student loan servicers, offers a .25% interest rate discount for signing up for automatic withdrawals from your checking account. Some lenders even offer additional interest rate discounts for opening a checking account with the lender. While the discount is small, and there can be headaches associated with allowing your lender access to your bank account, the interest rate reduction can save you money every month on your student loans.
This discount functions much like a scholarship because the effort to get it set up is small, but you do get a monthly reward for jumping through this particular hoop.
Student Loan Refinancing – Part of the reason student loans are so difficult to pay back is because you are fighting an uphill battle against the interest on your debt. Many borrowers are sad to learn that a large portion of their monthly payment goes to interest… not reducing their principal balance. This is because lenders typically charge high interest rates to college students. These borrowers don’t have a job or a degree and will usually sign for whatever interest rate the bank is offering. Once you finish school, you hopefully have a job and a degree. This means you are a lower risk to lenders, and many lenders will offer significantly lower interest rates. This can save borrowers thousands of dollars per year. We have reviewed and ranked the student loan refinancing companies.
The process of refinancing is like a scholarship in a couple of different ways. First, borrowers who work hard in school to get good jobs are rewarded for their efforts in the form of lower interest rates. Second, borrowers who refinance often can get a cash bonus for taking their business to a new lender.
Need Based Help from Lenders – For borrowers who are really struggling to pay back their student loans, some lenders offer a temporary interest rate reduction. Lenders usually reserve this option for borrowers who have fallen behind on their student loans and have little chance of paying back the debt without some help. One example would be the rate reduction program from Navient.
Enrolling in a rate reduction program is similar to a need-based scholarship. The key to success will be demonstrating that you need the assistance and that it will make a difference in your life.
The Story on Scholarships After College
Scholarships long after school would be great, but they really don’t exist. However, if you direct your scholarship acquiring skills to enrolling in programs that save money on student loans, there is money to be saved.