We get calls on a regular basis about being able to declare bankruptcy on student loans. As of right now bankruptcy on student loans are not available due to the language in what "undue hardship" means. In this blog we have put together things you should know before taking out a student loan.
In today's society, the average student will owe around $30,000. Some loans will be drastically higher depending on a few factors; did you live on campus? Did you go beyond four years? Did you go to a private or state school? U.S. News and World Report have mapped out why the student loan debt is averaged at $30,000 per student.
The more you know about student loans, the better.
Borrow the bare minimum – This will require research. Look at a college's cost per semester, your cost of living, what you bring in from your job, if your family is willing to contribute and any kind of grants or scholarships. Keep in mind that you don't have to accept the full amount that you are offered on a loan.
Work while you go to school – You won't have to borrow nearly as much if you have a job while going to school. You may qualify for a work-study program at your school.
Ask questions – If you are unsure how the process works, ask as many questions until you understand. The financial loan officers will have or can get the answers you need. Make sure you know all the rules and requirements for applying for a federal loan.
Understand what you are signing – Make sure that you understand the terms of the loan. Understanding the repayment plan, interest rates and the total cost will allow you to know what is expected once you are obligated to start paying off the loans.
Take note of private loan credit requirements – A private loan does require a credit check. If you do not have a credit history, you will need a cosigner to help with credit history and credit score. The cosigner is responsible for making the payment if you cannot make the payment.
Make interest payments while still in school – While you are still in school you can make smaller payments on the interest to help reduce the overall amount that will need to be repaid six months after you are finished with school.
Research starting salaries in your field – Before you start school use job sites or ask your school how much recent graduates are making in your field of study. Even if what you are going to school for might be a passion, you may find out that you cannot live on the wages that position offers.
Live at home – If you can pass on the "college experience" live at home to save housing costs. A lot of schools have started making it a requirement to live your first year on campus. Schools do have request forms that allow students not to live on campus. If you live at home, this can save upwards of $10,000 a year on student loans.