Educate yourself on student debt.
Student debt – estimated at over $1 trillion – has now surpassed both credit card debt and auto loan debt. The intersection of increasing student loan debt and a tough job market has today’s college graduate realizing that there is no such thing as Easy Street. While arguably a good education is still a good investment, it isn’t advisable to finance an expensive college education without considering how easily the debt can be paid afterwards.
Cornerstone Financial Credit Union sponsors an annual $25,000 scholarship program for college-bound high school seniors in Middle Tennessee. As a part of the application, we ask for feedback about how these teenagers plan to watch their financial p’s and q’s during college so that they’ll start out on solid ground when they graduate. You can read some of the 2012 winner responses here. We think they have some solid ideas, like:
1) Applying for as many scholarships as possible.
2) Studying hard to maintain a high GPA in order to continue receiving scholarship money.
3) Working a part-time job while in college.
4) Picking a major in a field where there are good job opportunities.
According to a report by the Institute for College Access and Success’s Project on Student Debt, the average student-loan debt of borrowers in the college class of 2011 rose to about $26,500, a 5 percent increase from about $25,350 the previous year.
The good news is that graduating with student loan debt probably won’t negatively impact your credit report. But not paying it back in a timely manner will. Like anything else we buy “on credit”, purchasing a college education on credit means graduating “in debt”. Take a few tips from our savvy scholarship winners and make plans before you borrow.