Whether you are a newly graduated high school student looking at your educational options, or a working adult who wants to continue your education, chances are student loans will be a part of your future. Student loan debt is some of the most lingering that one can accrue. It is not uncommon to be making student loan payments into your 40s or 50s. But there are things you can do before you even get to college to ascertain what kind of student loans are right for you and your financial situation. Doing research beforehand can make it a lot easier to deal with once that debt becomes due.
Know about the different kinds of student loans and which are most helpful in certain situations. There are federal loans, private loans, state loans and loans that are offered by the individual schools. It is often suggested to new college students to exhaust any grants and federal loans they are eligible for before taking out private loans but this may not always be the best route to take. For example, in 2011, a provision in the Budget Control Act stated that graduate students could not receive subsidized loans. In other words, undergraduate students have their loans balance deferred until they graduate but graduate students have to start paying on their loans right away. This is an important thing to know if you need to take out student loans for graduate school. Make sure you understand all of your options and what the best options in your situation may be. Talk to a financial aid counselor about what your options are.
Once you have the student loans, you need to know the totality of the situation. How many loans do you have? What is the total balance of your loans? What is the interest? When do you have to start repaying and what are your options for repayment? If you don’t know the answers to these questions then you need to find out. The best way to handle any kind of debt is to completely understand what the situation is. It is impossible to create a plan when you don’t know the whole picture. Don’t get overwhelmed during this phase, it can be managed. It might also be advantageous for you to make payments during your deferment period if you are able since this will allow you to get the upper hand on your future repayments. If that isn’t possible, you will need a realistic plan for how you want to repay these student loans once you graduate.
You also need to be realistic about how much debt you can afford to pay back. Look at your field of study from a realistic point of view. It may seem like a good idea to get a fine arts degree when you are doing it but what kind of job can you get with it? According to a 2011 CBS article, fine arts majors have a 16.2 percent unemployment rate. So it may not be such a wise idea to amass tens of thousands of dollars in student loan debt when the chances that you won’t be using it for a career are fairly high. On the other hand, according to a companion CBS article, nursing majors have a 2.2 percent unemployment rate so having a lot of student loan debt would be easier to manage.
If you find yourself in trouble, know what your options are. Maybe it would be a better idea to switch to an income based repayment plan if you aren’t making as much money as you expected after graduation. Perhaps you can renegotiate your interest rates on your loans. The lender may have an extended repayment option of which you can take advantage. One excellent way to save money on student loans is to make more than your minimum payment whenever possible, this will lower the amount of interest that you have to pay overall. A lot of lenders might also offer benefits for automatic payments so this might be something else to consider. Does your lender have options for those having financial trouble? You will never know until you ask and the worst that they can say is no.
Keep in mind that there are a lot of options out there for assisting you in managing your student loan debt. It is one of the few kinds of debt that are not applicable if you file bankruptcy, so it is important to try all available avenues to help you ease the burden. In an ideal world, student loans would be unnecessary, but unfortunately that is not the reality we live in. Know your choices, know your goals and realistically determine what your best course of action is.