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Tips for Repaying Student Loans
Of the $80,000 in student loans he took out to finance his business degree, he says only about 10% are federal, at 6.8% interest, and the rest are private, at 4.25%. His after-tax earnings total about $6,000 per month, and he plans to make monthly loan payments of $3,500 to $4,000. Mr. Kaehler says the low cost of living in South Bend makes it easier for him to meet his loan-payment and retirement-savings goals. He says he hopes to have the loans paid off by early 2015.
Student loan forgiveness: What you don’t know (but should)
Try again By submitting you agree to our Terms of Service Your Take contributions have not been reviewed for accuracy by USA TODAY. Contributors agree to our Terms of Service and are responsible for the content of their videos and photos. Please report any content that violates the terms. Emily Atteberry, USATODAY 12:02 p.m. EST December 6, 2013 The Consumer Financial Protection Bureau estimates that one-fourth of the American workforce may be eligible for repayment or loan-forgiveness programs, the Associated Press reported last month. How much more can you expect in your paycheck?
4 Ways to Cut Student Loan Debt While You’re Still in School
Set up email or text alerts to go directly to your smartphone from a free online service that organizes all your bill due dates and accounts and even keeps records of bills and payments, including those for student loans. Pay cash whenever possible Student loan money should never be used for financing fancy apartments, shopping trips or partying while you are in school, says Cruze. You want to figure out how to take fewer loans and use less money each semester, not take and use every loan offered when you really dont need it. If parents can help by paying what they can afford and you can pay some by participating in a work-study program or getting a part-time job , ask your school about a monthly cash payment plan to help cut borrowing, says Cruze. Both experts agree on keeping a cash stash as an emergency fund of at least $500, to avoid leaning on credit cards or your student loans for emergencies and unplanned expenses such as an unusually expensive text book, car repairs or a medical or dental visit. You may not realize it now, but your future self will thank you for borrowing less during school, when youre not saddled at your first real career job with repaying as much in total student loan debt, says Cruze. Use the Federal Student Aid websites Repayment Comparison Calculator for an eye-opener on how much and how long youll be repaying student loans versus the borrowed amount, simply depending on the interest rate.
Student Loans… But Only for Some
But in this case, its also important to think as a taxpayer with a social conscience. In particular, I worry about adverse selection: how academically average students attending middle-of-the-road private and public institutions will have little choice but to finance their equally expensive educations with government-guaranteed loansthe same loans that may very well burden taxpayers when the borrowers are unable to find jobs that pay enough . This approach is also yet another example of a culture of disproportionality that promises to widen an already extensive gulf that exists between economic haves and have-nots. Look, there will always be demand for concierge-level education just as there is for exclusive housing, travel and healthcare. The macroeconomic question we should seriously contemplate, however, is this: Will those at the top who are able to afford all these things consume enough to make up for those in the middle and at the bottom who wont? This story is an Op/Ed contribution to Credit.com and does not necessarily represent the views of the company or its affiliates.