One of the most popular suggestions for how new grads can pay off their college debt is to get a side job. Having a side hustle, in addition to a full-time job, can help graduates increase their overall income and pay off student loans faster.
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What if a student decides to have a crush while still in college? Depending on the financial situation of the student, it may or may not be possible to work in parallel. Here’s what students need to know about the impact of secondary hustle on financial aid contributions before agreeing to work this kind of gig. Plus, learn about the alternative to secondary hustle and how students can juggle work and class and class.
Take into account the expected family contribution (EFC)
Many students rely on financial aid to cover college expenses, but financial aid programs don’t always cover full costs. This means that many students have to work while attending school.
Charlie Javice – head of student solutions, Chase and founder of Frank – said that in situations like these, students should keep the Expected Family Contribution (EFC) in mind.
“If a maximum annual salary threshold is reached during your studies, it could impact the aid you are entitled to,” Javice said. “The higher your EFC, the lower your offer of aid will be from intended colleges.”
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Student status: are you dependent or independent?
The amount a student could earn from a side gig depends on the student’s status, dependent or independent.
Dependent students, meaning those who used their parent’s information when filing FAFSA, can earn up to $6,600 a year before it affects their financial aid. Independent students, those who used their own information when filing FAFSA, can earn $10,360 if they are single. If the student is married, he can earn up to $16,620.
Are there options that allow you to work in college?
There is another potentially tax-exempt option available to students: the work-study program.
“If students need more money to cover school expenses, it might be a good idea to consider a work-study program,” Javice said. “Any money earned in one of these programs is not considered taxable income; it will actually be considered financial aid! »
Strategically choose a secondary agitation
Students who plan to work while in college, whether through an internship or side-hustle, are encouraged to strategically choose a role that maximizes their experience and skills.
In a previous GOBankingRates article on the best hustles for students, Scott Gibney, education and career consultant at Gibney Solutions LLC, recommended hustles for students in a wide range of disciplines from communications to art and theater. . Gibney said students should consider how this activity can play a positive role in securing employment after graduation.
While there is always an opportunity to work as a rideshare or food delivery driver, students ultimately benefit the most from working in a role that focuses on their primary goals and career goals.
Tips for juggling work and school
Working while going to college, regardless of your course load, is a big commitment. (It’s even a commitment for post-graduate grads who work full-time and maintain side hustles!)
For students working while attending school, Javice said it’s important to remember that the two key success factors are organizational and time management skills.
Even if you want to work as many hours as possible, don’t overload your bandwidth or you risk burning out. Joe DePaulo, co-founder and CEO of College Ave Student Loans, recommends students limit their work hours to 12 hours or less each week. This ensures that their studies remain the priority and that they graduate on time.
“While many students have to work to get into higher education, the importance of finding a schedule and balance that works for you is extremely important for physical and mental health,” Javice said.
What else should you know about working before you graduate?
Every student’s situation is different, but deciding to work while in college can bring many benefits to your current and future financial well-being. Javice recommends that students who were already working before graduating put some of that money aside to help pay their student loans.
“Most loan providers don’t start your repayment with interest until six months after you graduate, so any money you can pay within that six-month window will help you pay off your principal balance faster and accrue less interest overall,” Javice said.
While side gigs are a source of income that students can use to help pay for expenses, they shouldn’t become a higher priority than education.
“Make sure you don’t lose sight of why you’re in college in the first place — to get a degree,” DePaulo said.
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This article originally appeared on GOBankingRates.com: How a side gig could be key for college kids to pay off student loans