All of us have heard the horror stories about college loan payments, like about that young man who could not find a job and wrecked his credit after defaulting on the mountain of debt, or a couple of young people who had no opportunity to buy a house because of their huge college loans.However, you should not consider student loans as something horrible. They do not actually harm students’ financial life. Besides, if you can manage it wisely, it may become a great chance to fill the gap between the costs of education of your dreams and the money you currently possess.
John A. Hupalo, a founder of an Invite Education and a co-author of the book about planning and financing college education, says that despite lots of disadvantages of student loans, they provide students with an early credit line that in future might increase chances for credits like car loans and mortgages.
Hupalo also adds that the main point is realizing how much of a loan you can handle. Begin with a small amount. Most experts agree that if the total debt exceeds the expected first-year earnings, it is excessive. Usually, loans are the biggest part of college aid packages which misleads families, so they are driven to believe that they can pay for their child’s education. If the college forces you to take a student loan that greatly exceeds the amount you will earn during the first year after college, then you should better negotiate another aid package or select another college with more profitable terms of payment.
Managing Student Loan Payments
To cope with all the difficulties you can face, you should create a smart payment plan that will ease the task. One way to cope with this problem earlier is not to wait until graduation to start paying the debt out. It would be great if you were able to chip in even $25 monthly. This way, major amount of the loan will decrease.
One more advice that will help you cope with the student loan fast is using a repayment calculator that helps estimate what the monthly expense will be.
Finally, the most important advice. When you graduate, continue living a college lifestyle. Face the reality of your debt situation and make every effort to pay the loan out. Probably, you managed to budget in college, so do not stop now. Find a roommate to share rent expenses. Always find ways to save extra money. Cook at home instead of going to restaurants. Plan efficient routes, walk and bike instead of using public transportation. Visit free museums instead of expensive concerts and exhibitions.
Handle loans wisely and use these pieces of advice on managing payments, and you will not face difficulties with student loans.