As we approach the college decision time, thousands of incoming freshmen will prepare for their new future.
Whether their school is located around the corner, across the state, or across the country it is certain that many of these students will pay for their tuition with the assistance of student loans.
This recent article highlights smart ways to keep loans to a minimum.
- Don't borrow as much as you can; just what you need. Many students take out more loans than they need to cover college expenses. Beer money, shopping trips, and spring break can be paid for with an on campus job.
- Use your 4 years wisely and graduate on time! Only 39% of students graduate in 4 years versus the majority who graduate in six. Adding extra time when you have borrowed money only sets you back farther when loan payments start.
- Think twice about borrowing more than what you can earn. Typically, you can only afford to borrow as much as you expect to earn your first year working in your field. For different areas of expertise this will vary greatly. For example, an engineering or science major may earn more than a fine arts or music major.
- Consider your public in-state college. State schools are often over looked but can be the best value because of the discount for state residents.
- Don't miss your loan payments. If you go into default, for federal loans 6-9 months of no-payment depending on the type of loan, it is almost impossible to discharge the loans in bankruptcy.
However, this does not only apply to millennials but their parents too! If you have a child going to college or are planning ahead talk with your financial advisor, you may be surprised how a little forethought can make a huge impact for your child's future.
Caroline Hill, Financial Advisor
(This article contains the current opinions of the author but not necessarily those of Brighton Securities Corp. The author's opinions are subject to change without notice. This blog post is for informational purposes only. Forecasts, estimates, and certain information contained herein should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. References to specific securities and their issuers are for illustrative purposes only and are not intended and should not be interpreted as recommendations to purchase or sell such securities).