Across the country, paying for college and accumulating debt is a concern for many students and parents. The University of Iowa’s Financial Literacy Services program, offered by the Office of Student Financial Aid, is providing free financial counseling and budget planning services to help students become smart money managers and, in many cases, save thousands of dollars in loans.

“Providing access to an affordable education is a big priority for the UI,” says Mark Warner, UI assistant provost and director of student financial aid. “No matter what situation you may be in, we’re here to assist with the costs for our students’ educational investment and alleviate worry about being burdened with debt in as many ways as possible.”

Warner says his staff discourages students from borrowing more than they really need to finance their educations. However, they understand some students and families may make the choice to take out loans over and above the amount they need to pay for tuition and fees, books, and reasonable living expenses. That’s why the UI has placed importance on working with students to manage their limited resources and learn how to create a reasonable and adequate budget.

UI Financial Literacy Services provides one-on-one, in-depth loan counseling and budgeting assistance. It started two years ago as a pilot program funded by a Student Success grant, focusing on first-year students. In June, two full-time financial literacy specialists joined the program, and its reach was expanded to all undergraduate students. Since then, the three-person Financial Literacy Services team has met with more than 850 students for private loan counseling, saving an average of 14 percent per student; and more than 135 students for unsubsidized loan counseling, saving an average of 13 percent per student.

“It can be daunting to see the amount of money you may owe,” says Sara Harrington, assistant director of satisfactory progress and loans at the UI Office of Student Financial Aid. “We’re here to explain what everything means for students and help take the uncertainty out of financing their education.”

UI Financial Literacy Services provides each student with a personalized spreadsheet, which includes what they’ve borrowed to date, estimates for loan repayment, and recommendations for loan reduction. Then, a financial literacy specialist discusses options for repayment and alternative funding options, such as federal aid, parent PLUS loan, or, in some cases, employment.

All students wishing to receive a private loan or additional unsubsidized loan due to Parent PLUS Loan denial must meet with a financial literacy specialist before their loan will be processed. It’s an opportunity first-year student Abby McGee says she’s thankful for, and one she would’ve taken advantage of even if it wasn’t a requirement for her private loan.

“I needed to talk with someone about what type of loan I was getting because I had more than one choice,” says McGee, from Huxley, Iowa. “I definitely think meeting with a financial literacy specialist helped. She helped me choose a loan that would save me a lot of money over the long run, and I’ll continue to check in with her if I have any questions during my time at the UI.”

The Financial Literacy Services team recommends these top five steps every college student can take to become a smart money manager:

• Develop an annual budget by itemizing your monthly expenses and monthly financial resources, and determine if your monthly resources meet or exceed your expenses.
• Separate your expenses by those that are required and those that are discretionary.
• Identify ways to reduce your discretionary expenses and evaluate your budget at least monthly, if not weekly.
• Understand how your college education is being funded and how that affects your future financial situation.
• If loans are a source of funding for college, use your budget to determine the minimum loan funds needed to meet your expenses.

“Many parents help, but we just want to make sure students are actively involved in the process—from completing their FAFSA to signing their loans—because ultimately they will be the ones repaying their loans,” adds Harrington. “We’re committed to continuing to build relationships with and provide guidance to as many students as possible.”