Most students rely on loans to finance their college education. While most experts say that this type of debt can be a wise investment in the long run, they stress that students should weigh their personal needs, resources available, and ability to repay when considering how much is too much to borrow. The following tips can help you keep your student loan debt from becoming overwhelming.
Choose a Marketable Major
It pays to select a field of study that is in demand. Literally. It can mean the difference between quickly finding a well-paying job and being unemployed after graduation. That doesn’t mean you have to commit to a major in computer science, technology or engineering, if you have no interest in the subjects, but if you are majoring in a topic such as economics, taking accounting as well can’t hurt. If your field of study is history or government, you should consider also learning a foreign language, or if you are a journalism major, having a health, business or computer minor can bolster your opportunities.
Bypass the Standard Four-Year College Plan
You can save thousands of dollars by starting off at a community college and later transferring to a four-year school. Enrolling in Advanced Placement (AP) courses through the College Level Examination Program can also help high school students reduce future expenses by providing college credits. By graduating from a community college first, you can save up to $1,000 on textbooks, save on housing while living at home, and then move on to a four-year college debt-free.
Don’t Overlook Scholarships and Grants
Research the schools you are interested in to find all of the grants and scholarships you qualify for. Look for offerings from community groups and local foundations as sources of support. In New Jersey, check out the Higher Education Student Assistance Authority (HESAA) for help locating sources of applicable scholarships and grants.
Apply For Federal Student Loans
Most students rely on federal government loans to finance at least a portion of their education, as they do not require collateral or credit checks, and they feature low interest rates. They also offer a variety of extended repayment and deferment options. Federal PLUS loans are available for parents, while Federal Perkins and Federal Direct Loans are available for students.
Consider Private and Supplemental Loans
If you have exhausted all of your resources such as grants, scholarships and federal loans, and still have college expenses that aren’t covered, supplemental loans like New Jersey College Loans to Assist State Students (NJCLASS) can help bridge the gap between the full cost of your education, grants and scholarships you’ve been awarded, and the amount you can borrow from government programs.Borrow Smart
Calculate the amount of college debt you can reasonably shoulder. There are many online student loan calculators available online to assist you in estimating the amount of college debt you can manage based on your major’s starting salary, your maximum recommended loan debt, and the total cost to repay. A typical guideline is to borrow no more than twice your anticipated beginning salary upon graduation to reduce the risk of default.
