Student Loan Advice
FT LAUDERDALE, Fla.—Student loans can be a double-edged sword. On one side, they may allow recent graduates to build a successful career, buy a home and form a family. On the other side, they can become a nightmare for many graduates who are unemployed or whose salaries are not high enough.
Student-loan debt reached nearly $1.2 trillion, and it keeps escalating month by month, according to the Consumer Financial Protection Bureau. Twenty-five percent of graduate students owe nearly $100,000 in student loans and reports show that 7 in 10 students graduate with an average of $29,400 in debt.
Finance experts predict that student debt is on the verge of explosion.
“As recent grads fall behind on their payments, their credit scores are dramatically affected,” says Howard Dvorkin, CPA and Chairman of Debt.com. “In this still struggling economy many recent graduates find it impossible to find jobs that allow them to pay back their loans.”
Dvorkin also explains that family dynamics are also affected. As a result of unemployment or low salaries, recent graduates live at home for longer periods of time, causing their parents to pay for expenses.
Debt.com advises students to explore options before getting a loan.
Community college: One option that decreases education costs is attending a community college for two years, and later transferring those credits to a university. When students live at home while attending college, they can cut tuition, rent, food, and transportation costs.
Look for scholarships: Before obtaining a loan, students should apply for every scholarship available to them. First, it’s important to make a list of scholarships that support certain careers. For example, engineering students should target companies that support technology. Then, students should make a second list of the rest of the institutions that offer standard scholarships and apply for all the scholarships from both lists.
Work part time: Working 15 to 20 hours a week can pay off. Even if the pay is low, it can cover school expenses such as books and student fees. Working can turn into a positive endeavor as students gain experience and meet potential employers.