More than 43 million people borrow money with student loans. And these days, the average monthly payment is $337.
But many student loan borrowers can’t bear the weight of their debt. So it’s not surprising to think that a significant portion of people with student loans regret taking out the loan in the first place.
If you want to go to college, you want to avoid this kind of situation at all costs. You can avoid student loan regrets by following these tips.
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1. Stick to Federal Student Loans Only
If you can’t get all the federal aid you need to attend the school of your choice, you may be tempted to take out a private student loan. However, you should know that renting privately for college has some drawbacks.
First, if you borrow through a private financial institution, the interest rate associated with the loan can be much higher than a federal loan. But federal student loan borrowers are also entitled to certain protections that private borrowers do not.
If you take out a federal student loan and find yourself in trouble, you may be able to defer your loan for a period of time or defer your loan. If you rent privately, you may not get the same options.
Similarly, when taking out federal student loans, there are different repayment plans to choose from after graduation. With a private loan, you are limited to one payment plan option and monthly payments can be prohibitively high.
2. See if your major or career is compatible with paying off debt
You may want to study something that you are passionate about at university. But it’s also important to be realistic about what kind of career it will lead to.
If you borrow $35,000 to go to college just to embark on a career that makes $30,000 to $40,000 in the first 10 years of your life or longer, that amount is really hard to pay back. may become. Use a tool like Salary.com to get salary estimates for various occupations in your area and see if the amount you’re considering borrowing is worth it.
3. Find ways to keep the cost of education as low as possible
The more money you spend on your education, the more money you may have to borrow. So if you’re willing to make some sacrifices, you can do your part to minimize your student loan balance.
First, consider skipping private college and attending a public college in your local state. If you can live at home while attending college, you may save even more by not having to pay for a room or board.
Another option is to spend your first year or two at a community college. That way, after meeting the basic requirements of higher education, you can move on to a more expensive school and focus on your major.
You definitely don’t want to take out a college loan to get your degree and then spend a lot of your adult life regretting your decision. If you borrow strategically and minimize your debt, you may find that paying off your loans isn’t too difficult and doesn’t get in the way of achieving the other financial goals you’ve set for yourself.
