Are there any rules of thumb when it comes to student loans?

HI There,

There are a lot of thoughts out there around school loans. My up front advice is avoid loans at all cost. I went to a private university and really did not think about the cost or how I would pay for it. I took out a lot of loans to afford my education and it took me almost 20 years to pay that back. If someone had told me that before I started going to school, I would have never done that. Be very careful with loans as when you come out of college, the level of jobs that you qualify for do not pay a lot and its really hard to pay off the loans.

Find a public university that is affordable. Even if that means community college for a couple of years and then onto a larger school, in the end, its where you graduate from that matters.

Apply for as much free money loans that you can find. See if your school has scholarships that you can apply for.

Take a part time job and go to school part time.

Hi Shauna,  I'm glad you're asking this question.  Student loans are an investment in yourself and can be a "good" debt to get into, assuming your career will allow you to pay off the loans. I'd recommend that you only commit to loans that you will be able to pay within 10 years of completing your degree. There are calculators online that will help you to determine a typical salary for your career choice and the cost of your college.

Shauna,

Here's some of the most important things I've learned from working with people to work out strategies to pay back student loans:

1) College is an investment in your future. Be realistic about the investment you're making in yourself. How much debt are you planning to take on, and how long will it take you pay to back? How much money do you expect to earn? That doesn't mean you should focus on making the most money. It just means that doing some homework and being honest with yourself can save you thousands, if not tens of thousands of dollars in the long-term. You're borrowing from your future self, and your future self will thank you for making a good investment!

2) Learn about what loans are available. There's a ton of different loan options; this is a good starting place to help you learn more:

https://www.salliemae.com/college-planning/student-loans-and-borrowing/

3) You probably know this, but always file a FAFSA form, even if you think you don't qualify. You might be surprised, and it's free:

https://studentaid.ed.gov/sa/fafsa

4) When you come to the point of repaying your loans, consider income-driven repayment plans. These base your student payment on a portion of your income, as opposed to a fixed costs. However, BE CAREFUL because life events (e.g. raises or bonuses, marriages) and processing requirements (e.g. annual recertification) can drastically affect your payments.

https://studentaid.ed.gov/sa/repay-loans/understand/plans/income-driven

Additionally, if you're employed by the government or a non-profit, you may qualify for Public Service Loan Forgiveness (PSLF), which forgives a portion of your loan, without tax consequences, after 120 payments.

5) Last, but not least, this is complicated. Don't feel discouraged, even though the resources out there aren't particularly helpful. By even asking this question, you're further ahead than you realize.