Financial Aid Friday

How to Minimize Your Student Loan Debt
Borrow only what you truly need for college so you can minimize your student loan debt and not have massive payments after college.

By Hon. John C. Ninfo (taken from http://www.nextstepmag.com)

Too many students graduate from college or grad school with so much student loan debt that it has a negative lifelong impact on their career and lifestyle choices. Here are some ways to minimize your debt.

Aim to graduate in four
While you are in high school, develop the mindset that you will graduate from college in four years. Think about what you want to do in the future so you can enter college with a designated major or field of study. The sooner you commit to a major, the sooner you’ll be able to graduate.

Get as much credit as early as possible
In high school, take AP courses that will help you qualify for college credit. Apply for all the scholarships and grants you may be eligible for. Start at nextSTEPmag.com/Scholarships.

Save
In high school and at college, earn and save as much money as you can at the best after-school and summer jobs and internships you can find. You may not be able to afford to work at a summer camp for $3 an hour just because you like kids.

Explore your options
Consider state schools and 2+2 programs. If you want to go to a public college in a different state, consider establishing residency first to become eligible for in-state tuition. If you want to be a high school teacher in your community, you may not need to go to an expensive school and incur all that debt. That’s true of many careers. Also consider military options, including ROTC, as a way to help fund your education.Financial aid packages may make private schools less expensive than state schools, so don’t count them out.

Budget your living expenses
If you live away from home for college, have a sound overall financial plan. Visit the CARE program Web site, careprogram.us, to develop a realistic college budget.

Use loan money wisely
Don’t use student loan money for unnecessary lifestyle expenses, like spring break trips or concert tickets. When you are still making big monthly payments in 20 years, you may regret those choices.

Know your future salary
Research the salary ranges for your chosen career, then calculate how much student loan debt you can actually repay along with your estimated living expenses. Recalculate your numbers if you change majors, career choices or residence location. For hundreds of different types of jobs, the Occupational Outlook Handbook (bls.gov/oco) tells you the training and education needed, earnings, expected job prospects and more. Also visit nextSTEPmag.com/Careers.

Know your debt load
After every semester, calculate the monthly payment for your accumulated student loan debt over different lengths of time (10, 20 or 30 years). You don’t want to get to your senior year and find yourself with too much debt. If possible, start paying the interest on your student loans while you are in school.

Be smart about changing your major
If you change majors, stay on top of the required courses you will need to complete your new major. Take them as quickly as possible and realize that they may only be offered certain semesters or only at night.

Hon. John C. Ninfo is a U.S. Bankruptcy Court judge. Visit the CARE program Web site, which educates students about credit and debt, at careprogram.us.