GOING to college is a good thing as it can open greater opportunities for employment and has the potential to transform someone to higher level of success. There are various ways to finance a college education, one of which, and maybe the most popular means, is by obtaining student loans.
It might seem overwhelming as you get presented with large amounts of money easily available to you when you are entering college. Loans are available through government programs, either subsidized or unsubsidized, and through private organizations.
These loans usually come with high interest rates and fees. Be aware that you will eventually have to pay back every penny of these loans. And too many college graduates nowadays have been trapped to getting a very expensive college education, only to realize in the future that repaying student loans would consume a great portion of their financial lives, sometimes wrecking havoc on the dream of financial freedom.
I know quite a few who are high-degree professionals but are still indebted to these loans while they get closer to retirement.
Consider the following facts for college education:
1. You can get student loans but the total loan amount should not exceed your first year’s salary as you get out of college. Keeping this limit in check will make it possible for you to pay back what you borrowed in a reasonable time.
2. Choose an affordable school, especially during the first two years in college. There are excellent state schools that offer lower tuition costs. This will save you a significant amount of money.
3. You can partially subsidize your education by working part-time. Make sure you are saving enough for schooling while working summer jobs. Working one or two part-time jobs also helps you curve on unnecessary spending as there is not enough time to be spent on shopping.
4. Live on a budget and live like a student. It’s a common financial pitfall with our current consumer-driven culture. Parents spoiling their high school or college children with expensive material things just doesn’t make financial sense.
5. Study hard and keep your high grades. This could possibly qualify you for grants and scholarships. Take every opportunity to apply for them. Whether full or part-time, scholarships could help you save over the long term.
Remember, student loans are expensive, can last for decades, can ruin your credit if on default, and have to be repaid whether you graduate or not.
So before you sign up for that $40,000 a year loan, think twice. Unless you have enough college savings earned or you’re one of the Joneses, it might not be a brilliant idea.
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Evangeline is a California registered tax preparer, a legal document assistant for the general public, and a freelance paralegal offering assistance to various attorneys. She can be reached at her office at 2451 Colorado Blvd. #2, Eagle Rock, CA 90041 or at her marketing location inside the Eagle Rock Plaza. Her phone number is (323) 550-1869 or you can check her website at: www.evangelinegiron.net. She is a member of the court-endorsed California Association of Legal Document Assistant (CALDA) and an Associate Member (Non-attorney) of the LA County Bar Association (LACBA).
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Note: Evangeline is not an attorney nor does she provide legal advice. She is a bonded and registered Legal Document Assistant and prepares legal documents per the specific direction of clients.