How to Avoid Post-College Debt |
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Posted By: Julie Shenkman In: Business Professional
With the rising cost of education, many students rely on loans to help finance their education. While student loans are a good option for those in need of financial assistance, it can also create an overwhelming amount of debt.
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With the rising cost of education, many students rely on loans to help finance their education. While student loans are a good option for those in need of financial assistance, it can also create an overwhelming amount of debt.
After graduation, students not only face the pressure of finding the perfect job, they also begin to fully realize the financial burden of their student loans. Regardless of whether or not they finish their education or find a job after college, their loans must be repaid.
Over 3,100 Beyond.com Network users were asked "Do you still have student loans that you are paying off?" More than 33 percent said they are still paying off student loans, while the remaining respondents reported they do not have any student loans.
Of the respondents with student loans, nearly 47 percent owe between $10,000 and $25,000, 31.69 percent owe $25,000 to $50,000, 19.06 percent owe more than $50,000, and only 2.36 percent owe less than $10,000.
Although it can be intimidating to begin your professional life with a significant financial burden, here are a few tips to help effectively manage your student loans:
Pay off as much as possible during the six or nine month grace period – it goes directly to the loan’s principal before interest starts accruing.
Consolidate loans into one simple payment which can many times lower interest rates.
Set a budget and stick to it.
Research education-related tax credits and deductions.
Sign up for direct withdrawal to ensure loan payments are on time.
Strive to pay above the minimum loan payment.
For additional resources and information on money management and student loan consolidation visit our Career Resources or Student Loan Consolidation Form.
Content for this article provided by Beyond.com
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Comments
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Posted by: Kevin
I agree, don't get them! I worked my way through college, almost always taking less than a full load. I usually worked about 20 hours per week during the school year and full time on breaks and during the summer. It took five years, and I lived at home for four of them, and drove an absolute beater, but had zero debt after graduation.My wife on the other hand took out loans for grad school. Not a ton, but enough that 12 years later we're still paying on them. It's like a home loan. The principal may be one amount, but in the end, after interest, you'll have paid 3 to 4 times that amount. It's a big trap unless you're going into a very highly paid field, such as medicine.
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Posted by: Bill McCormack
Add to the tips:- Don't get the loans in the first place, and work your way through instead.I am basing this opinion on my daughter's experience. At one time colleges and universities treated working students with a degree of respect. At least they did when I went to college. Now they treat such students like a disease. Rising tuition rates are forcing students into the college loan scam, and working students are treated like unwanted stepchildren. At least my daughter was. She did have scholarships and such, but with each semester and the accompanying rise in tuition, the scholarships paid less. She had to work part time and the result was a complete loss of her scholarship. It wasn't because of her grades. She made straight A's and was on a pace to graduate a full year early, but because she was working, and taking 9-10 hours instead of 12, some idiot at her college decided she wasn't making satisfactory progress. Eventually she gave up college, lacking only about 20 hours.I think the recent scandals involving universities and loan companies should highlight what the problem is: greed and corruption on the part of our educational, financial, and government institutions.
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