Myths and Truths for Handling Student Debt

Americans owe more than $1.48 trillion in student loan debt.

Yours may be a beast to pay back so let’s take a closer look at a couple of student debt myths that can cost you.

Myth: wait until after you’re out of school to worry about making payments.

The truth is, subsidized federal loans do not accrue interest when you are in school.

But unsubsidized loans are not based on needs, and that interest adds up.

So once you are done with class and your grace period is over—you have a bigger balance to pay off.

Myth: you should borrow the full loan amount offered.

The truth: borrowing the max may seem easiest, but it makes it harder when you are trying to pay it back.

Experts suggest getting a job to cover living expenses and trying to borrow as little as possible outside of your actual tuition costs.

Myth: you’ll earn enough after college to handle your debt.

Many students make the mistake of assuming they will immediately start a job with a certain salary.

That’s not always the case.

The pros say you should create a mock post-grad budget, include all “real life” expenses, and then see how much a student loan payment would affect them.

If you need help managing your student debt, we’ve posted a link with some helpful resources here.

 

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