Re: How can I avoid drowning in debt from student loans? by: Nancy Castleman
It?s great that you?re asking this question now, before you?ve got a pile of college bills. Even in good economic times, far too many people find themselves in student loan hell, with huge debts that haunt them and have them paying interest on interest for decades. With the economy still hurting, lots more people just starting out are going to join them there. All it takes is a dose or two of career confusion, perhaps compounded by a job loss or an accident, and someone with a bright future can soon face a very dismal prospect: ballooning student debts and financial woes for as long as they live. (I am not exaggerating.)
The short answer to your question is to not borrow more than you are going to be able to pay back in a reasonable time frame, once you graduate. Of course, your ability to pay back what you borrow is going to be determined (to a large extent) by what job you get. There?s a great calculator on FinAid.org, ?The SmartStudent Guide to Financial Aid,? that lets you plug in your likely career and shows you how much you can reasonably afford to borrow for school: .
For example, say you?re majoring in physical therapy and expect to graduate in 2013. One click, and you?ll discover that your projected starting salary will be $52,600. You?ll also be advised not to borrow more than $13,401.67 a year, for a total of $53,606.68.
?If you borrow more than this amount, you may find your monthly loan payments too burdensome,? reports FinAid.org. ?Please note that these figures are not targets. The less money you borrow, the better off you'll be. Live like a student while you are in school, so you don't have to live like a student after you graduate.?
There are lots of ways to limit the amount you need to borrow. For example, you can take courses over the summer at low-cost institutions, no matter where you are enrolled. And you may be able to get college credits for what you already know, by simply taking a test. The College-Level Examination Program offers 34 CLEP tests in composition and literature, foreign languages, history, social sciences, math, science and business -- which are accepted at some 2,900 colleges. Visit for more info on CLEP. Make sure the credits will be accepted before you take a test or attend summer school.
Many students and their families focus on the aid package for the freshman year, and forget that financial aid packages can be improved over time. Get to know the financial aid folks at school. If there?s a grant or scholarship worth applying for, they?ll know about it.
Take advantage of your school?s Work/Study program, but if you can?t find a job that you enjoy and learn from through your college, find a job on or off campus on your own. Craigslist is a good place to start.
Keep asking good questions like this, and you?ll do just fine.
