Student Loan Debt
February 25, 2009 1 Comment
Like many college students, in order to fund my education I decided it would be best to take out student loans.
Like many college students, I didn’t consider how this would affect my future. I took out the maximum amount of money available and never gave it a second thought. The money that didn’t get applied directly to my tuition and other education expenses is now largely unaccounted for. How could I possibly have let so much money slip through my fingers and not know where it went?
I am still in school and will be for the next few years, possibly more. For now I am off the hook for having to make any payments, but once I am through with classes the bill will come due. In the meantime, what should I be doing in order to brace myself for when I have to pay those loans back?
Take only what I need- I have been taking the maximum amount available and that adds up fast. Did I really need that money? Probably not. I shouldn’t have been trying to fund a lifestyle that I couldn’t afford with loans that will have to be paid back.
Start repayment early- I recently set up my account to begin a repayment plan. Though I will only be making small payments for a while, even a small amount over time will help. If nothing else, it will help keep my interest from compounding like crazy over the next few years.
Live like a broke college student- Even though I have a full-time job and earn a decent wage, I need to scale back my lifestyle. It is better to live like a broke college student while I am a college student instead of living like a broke college student when I’m 45.
Eliminate all other debt- Interest rates on student loans are typically reasonable, and as such, I would be better off focusing my efforts on elimating other debts. If I focus on eliminating my car loan I could then apply that money towards my student loans. If I don’t focus on eliminating my other debt, I could find myself with a car payment and a student loan payment. Being in that situation would really leave me with empty pockets.
About Steven
College is becoming increasingly difficult to afford.
Borrowing money for college is a big responsibility but college remains a smart investment for obtaining a satisfying career that earns a competitive salary. Thanks for the post.