2 answers
Shirley
Student
Providence, Rhode Island
2
Questions
Updated
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Is taking out loans a big deal?
I'm excited about the college I'm going to but I'm not sure about taking out loans. Everyone is telling me that it's not such a big deal and that it doesn't really matter but I don't want to leave college in debt. #college #psychology #college-bound #loans
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2 answers
Katelyn Freund
Business Systems Analyst
4
Answers
Portland, Oregon
Updated
Katelyn’s Answer
Shirley, the answer to this is one that is double-sided. Firstly, loans and having school debt can be a huge mental burden, as well as the fact that any debt is more debt than one would like. Secondly, if you have other means in place (scholarship for instance) where you can cut down on school costs, take as much advantage as you can. School in the US is outrageously expensive. Where you can get scholarships, secondhand textbooks, summer jobs, etc. that will help ease the financial burden of school.
Some jobs (such as Teach for America) will forgive some school loans. But I would advise you to not operate off the assumption your loans will be forgiven, deferred or something like that. I say that because if you assume that and it doesn't turn out to be the case, then you'll feel more in the hole than you would if you prepare to pay it back. ("Pay it back" being also somewhat of a misnomer since with a loan you pay more than you borrow due to interest.)
It's possible your career choices and jobs after school will make paying off your loans manageable or you may make enough that it's not a problem.
It boils down to, are you willing to take on the debt? And if so, how much debt are you willing to take? And for how long? If you have extra income to pay down the principal, do consider that so your debt doesn't feel like it's never-ending.
You'll want to take a look at your holistic financial situation and see what's possible for you, where you see yourself after finishing school, and where you see yourself long-term. You may consider talking to who you bank with or those you trust about your situation. (As a final note, I wouldn't pay for a financial advisor for something like this as it's ultimately up to you to determine.)
Good luck!
Some jobs (such as Teach for America) will forgive some school loans. But I would advise you to not operate off the assumption your loans will be forgiven, deferred or something like that. I say that because if you assume that and it doesn't turn out to be the case, then you'll feel more in the hole than you would if you prepare to pay it back. ("Pay it back" being also somewhat of a misnomer since with a loan you pay more than you borrow due to interest.)
It's possible your career choices and jobs after school will make paying off your loans manageable or you may make enough that it's not a problem.
It boils down to, are you willing to take on the debt? And if so, how much debt are you willing to take? And for how long? If you have extra income to pay down the principal, do consider that so your debt doesn't feel like it's never-ending.
You'll want to take a look at your holistic financial situation and see what's possible for you, where you see yourself after finishing school, and where you see yourself long-term. You may consider talking to who you bank with or those you trust about your situation. (As a final note, I wouldn't pay for a financial advisor for something like this as it's ultimately up to you to determine.)
Good luck!
Garrett Coulson
Marketing Coordinator, Entrepreneur Spirit, Podcaster
1
Answer
Huntington Beach, California
Updated
Garrett’s Answer
What I would tell Shirley W. is that she should find a bank or an advisor that would help her step by step so she can get a better understanding how the process works.