Many people go into deep debt for an education. And while there are several different
types of federal student loan options to help you through college, it's best to know
how much debt you're taking on first. It's not enough to know how much debt you're
taking on though, you also need to consider how long that debt will take you to pay
off in full, how much the monthly payments are likely to be, and whether the career
choice you make will earn enough to pay the debt.
Let's look at each step in detail...
1. How much debt are you really taking on? It's common for college students to
not fully understand just how much debt they might be accumulating for their
education. At eighteen or nineteen, we're not always as organized as we should be,
and we don't usually read over all the fine print with contracts we sign.
Many college students find out after the fact that they're in debt for $20,000 or more
just in the first year alone. And if they've attended college for several years, those
student loans could total well over $100,000 before it's all said and done.
2. How much will the payments be? Student loan debts don't have to be paid
when you're attending school full time. Once you've graduated though, or if you drop
below half-time college enrollment, you usually have to start repaying your student
loans within six to nine months.
This gives most people plenty of time to start working and earning an income. If your
student loan debts are not excessive, your monthly repayment amounts might be as
little as $100. If, however, you've been in school for a number of years and taken on
large amounts of student loan debt, you could be facing monthly payment amounts
of $300-$500 or more.
For students who have dropped out of college or dropped below half time
enrollment, these loan payments can be quite difficult to handle, because you may
only be working part time, or you may have a difficult time finding well-paying jobs
without your degree. Try to learn in advance how much the estimated loan
repayment amounts are, so you can plan for those before taking on the student
loans in the first place.
3. Will Your Career Choice Be Adequate? Even if you get all the way through
college and get your degree, you may find it difficult to find a lucrative job in the field
you've chosen. And in some cases, finding a job is not difficult, but you discover after
the fact the entry level pay does not cover the monthly payments required for the
student loan debt you've acquired.
So before you start college and accumulate massive amounts of student loan debt,
be sure you've fully researched the profession you're attending school for. You
might be attracted to that field of study because average pay is $100,000 a year, only
to find out later that it could take you five or ten years of actual working in that field
before you'll reach those pay levels.
Be sensible and cautious when applying for student loans. It can feel like free
money when you're getting it, but it turns into a huge debt payment later in life.
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