We all know by now that in the United States, a university education has become very expensive. The average American makes about $50,000 per year, while most private colleges cost approximately the same amount (including Room & Board). For most Americans, this means that even after years of diligent saving, the only realistic way to pay for their kids? college is by taking out loans.
Loans should not be the first step, though. It?s very important to take full advantage of any free money you or your child can get , such as grants and scholarships. Take your search for free college money very seriously ? view it as a full-time job in fact. It can make a huge difference in your financial future.
Once you?ve exhausted all your options for free money, apply for low-cost federal college loans. Private student loans, even affordable student loans, should be your last resort. Keep in mind that taking out loans can be a slippery slope and one should not do so flippantly. Though we may not realize it in our teens, obtaining loans is a very serious commitment, and a loan does not equate to ?free money.? Procuring a loan does not mean that you can spend frivolously, and it does not permit you to put financial responsibility on the back burner.
Take out student loans only if it?s absolutely necessary to fund your education; don?t take out loans because you?d rather spend the cash that you do have on a trip to Cancun during spring break. You should only borrow the amount that you absolutely must borrow, after factoring in savings, scholarships, federal loans and any income you might be able to earn as a student.
Obviously, loans can be a double-edged sword, but student loans are not evil. They exist to help you. They effectively help people to further themselves in education and business. Use your loans properly and responsibly, be smart about your finances, and you?ll have them to thank for your college diploma. Use them wastefully and you?ll be working to pay them off for your entire post-college life.
In short, borrow responsibly. Remember that a loan is not your money; keep in mind that it is merely temporarily in your possession and that you are destined to repay your debt. If you do this, loans will work to your advantage, rather than becoming an unmanageable burden.
After graduating, work hard to pay your loans as quickly as possible, starting with the most expensive, high-interest loan. As Tim says in an inspiring Mint article, ?Each time I paid off a loan I became stronger and more determined to beat them all. Seeing all of your debt in once place can be overwhelming, but if you tackle it one step at a time, you can become debt-free too, so hang in there!?
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