How Can Someone Plan Their Education With Regards to Student Loan Debt?
What a person should do as a freshman is look at how much they plan to take in student loans. Then take a simple calculator and figure out how much they will have to repay over ten years, which is typically the student loan repayment period. This simple calculation will help them decide if they can afford to go to a particular school. Quite often, the answer is that it’s not smart. A person may have to choose a different school or maybe to go to a community college for the first two years. It’s not the 4-year experience, and it won’t include the parties, and the frats, and the big football games and all that, but it will save a lot of money.
My daughter is a psychology major and wants to work with adoption agencies. She can make a reasonable salary coming out and will have no loans. If she gets an advanced degree, she will make more money but needs to determine if the extra income will be worth the student loans needed to get that advanced degree. She will need to make a very honest business decision for herself. When I was in college, I never had to think about this so much. The whole year at a private college was about $3,500, so it wasn’t a big deal. With costs so much higher these days, these issues really need to be given some serious consideration.
If you want to help your kids, don’t guarantee student loans. Rather, start when they are born. Start a plan where you throw $100-200 a month into a fund to help pay for their school. It may not leave you enough for four years at Harvard, but at least there will be a nice enough amount to give them more choices and lessen the need for student loans. The key is to start early. Throw it into a mutual fund account; it’s boring, but it will grow.
My wife was smart enough to put some money away so that when my daughter chose a school, we had a certain amount to apply to it. The school gave her some money because she was a pretty good student, so I don’t think she will have any student loan debt coming out of undergrad. Although to go to graduate school, she may have to take out some loans and what we’re telling her is, let’s flush out the rest of your account, let us contribute something, maybe you work some, and if you have some debt, maybe it won’t be too bad.
For the first two years in higher education, most kids are just in big 300-student classrooms, being lectured by a graduate assistant. To me, this means the first couple of years of college aren’t the best value anyway. My wife and I went to a residential university, and part of the experience was living on campus with other like-minded kids and being in close proximity to the professors, but it’s not for everyone.
People have to reflect and have that mental discussion with themselves, their parents and others, but what do you know at the age of 17 or 18? All you can do is make the best decision possible at the time based upon how much you like to work, what you think you want to do and what you think your life might look like. You talk about it with everyone and come up with the best decision possible; it won’t always be the right decision, but you try to make the best decision.
For me, I made a good decision, but only because they said if I went to that school, they’d let me play football; I didn’t know any better. I was fortunate that the school was a liberal arts school with a Christian emphasis. It turns out that it was a good place to be and think about what I wanted to do with my life and what I wanted to contribute to the world.
It’s all about being a good consumer and a mindful purchaser of education. I don’t think people have thought about it up to this point, and it’s spilled over into this problematic, messy, student loan issue.
For more information on Exemptions In Bankruptcy, a initial consultation is your next best step. Get the information and legal answers you’re seeking by calling (818) 992-1940 today.
