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Archive for June, 2015

Student debt is a common topic in the national news with reports that the amount of outstanding student debt continues to increase (now exceeds total credit card debt) as are loan default rates.  Be aware that not all loans are the same.  In almost every case, federal student loans have the best combination of interest rates and repayment options/protections for the borrower so you should try to maximize those opportunities before taking out a loan from a private lender.

The following websites will help you become student loan savvy…

Be very careful about your annual amounts borrowed and project the total student loan debt expected to accumulate upon graduation.  As a rule of thumb, the amount you borrow in your first year of college is likely the minimum you will need to borrow each year through graduation.  There is no clear standard for how much debt is too much but there are calculators available that will project your monthly loan payments based on your projected debt upon graduation, which you can then use to calculate your debt-to-income ratio.

If you are not comfortable with the projected total debt, you should consider options that will reduce those costs.  Is there a less expensive living arrangement available, can you purchase your books on-line, have you considered working part-time, etc.?  Have you considered attending another college that is more affordable to you (sometimes a more expensive college can be more affordable if they can offer more aid) or attending community college for the first two years (usually half the price, or less, of a public four-year institution)?

Be intentional about your student loan debt and let it enable you to achieve your educational dreams while not becoming the anchor that restricts your options afterwards.

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