If you are graduating college, you are probably excited to receive your degree, but as you open your mail, you notice it is time to pay off your student loans. The growing debt may be depressing to you and you may feel overwhelmed.
As you study your student loan debt, you may be wondering if you borrowed way too much money. In fact, many students have student loan debt looming around $20,000 or more. It is important that you look at your student loan debt as an investment, especially if you have graduated from college.
Below, we will go over some helpful information when it comes to your student loans.
Limit Your Borrowing
One word of advice is that you should aim to borrow no more than half of what you make income wise in your first year of employment. For example, if you want to be a lawyer and the median income is $100,000, your law school debt should not be any higher than $50,000.
When you limit how much you borrow, you will not have to worry about paying back ridiculous amounts of debt once you do graduate. In addition, you will find that it does not eat up all of your income to pay back your debt either.
Make Sure You Go for a Degree You Want
If you are attending college just to do it, you are raising your debt and you are not accomplishing something you want to. You never want to take classes just to do them because then you are not working towards a meaningful degree.
It will be easier to pay off your student loans once you have a degree in hand that you want. In addition, you will be making a decent wage and can afford to make your monthly payments.
If you drop out of school, you will not be able to afford your monthly payment for your student loan debt if you are only making minimum wage.
What You Can Do When You Think You’ve Borrowed Too Much
If you think you have borrowed too much loan money, you cannot always return it. Although, if you borrow and receive additional funds, you can return the money within a certain amount of time back to your loan service provider and the provider will apply it directly to your balance, which means you do not have to pay interest on it.
Most of the time though, you have likely already received the funds and used them. When this happens, you can work with your loan servicer to work out different payment plan options.
One of the most common payment plan options is the income-based repayment plan. This plan will allow you to make payments towards your student loan debt and the amount you pay is based on how much money you make per year and the number of dependents you have.
There are other payment plan options that you may qualify for as well, but you will never know unless you speak with a professional.
Don’t Hesitate to Explore Your Options
You are not required to take out federal student loans and if you do not have to, then you should avoid them. Many students find they are able to pay for their schooling based on income-needed grants, scholarships, and similar. And, you should only use private student loans as a last resort.
If you want to talk about your options that are available, you can talk to your financial aid counselor. He or she will be able to guide you and let you know what the best route for you to take would be. Some students find that they are able to avoid student loan debt for at least the first two years of their degree.
Remember, never take out more money than you absolutely need to and explore other options for financing your college dream.
Author: Jeff Gitlen
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