Thanks for voting!Think you’ll still be paying back your student loan by the time social security is supposed to kick in? We hear ya. But a little relief could be on the way for those of you carrying federal student loans on your shoulders. The Associated Press gives the lowdown on how to take advantage of this new plan.
It’s definitely a step in the right direction for helping some pay off their college loans quickly. The plan will cap monthly loan payments for Americans with modest incomes and, in some cases, eventually forgive loan balances. For the rest of us, it doesn’t help us avoid all the trappings associated with most student loans. If only the time you spent looking into the nitty-gritty terms of a student loan or figuring out how much college would really cost equaled the time you invested in tracking down the perfect college town, right?
The question you have to ask yourself is do the ends justify the means? Sometimes it’s a matter of deciding what’s more important – a degree from a prominent college that comes with a hefty price tag or a degree from cheaper college that might not be a household name. And unlike choosing a major, your decision on how you’ll pay back your education loans should not be left undecided. Do your homework. Know what you’re getting into before it’s too late. Once the loan letters start showing up in your mailbox, try to contribute more than the monthly bill. This will help to pay down the principal loan amount quicker. Consolidate any loans you can, even if it’s for a .25% break in interest. Every little bit counts.
For those parents out there – whether your child is brand new to the world or a soon-to-be co-ed – it’s up to you to teach your kids the basics of student loans. Teach your little ones to save part of what they earn for their future education. Encourage your high schooler to apply for every scholarship offered by the colleges they are interested in and to take advantage of smaller scholarships awarded by local organizations. Tell your college freshman that as much as they think they need pizza and beef jerky, it may be a better idea to pay for some new books and other expenses as they go. Student grants, scholarships or student aid through a work study program are avenues you want to explore before signing on the dotted line. Make sure you and your child know that college loans come with serious strings attached. (Like paying them back on time. With interest. The nerve.) The most important thing for your kids to learn? The best kind of debt is no debt at all. Do your best to pay it off as quickly as possible.
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