The Danger of Student Loans.

Getting accepted to the school of year dreams is one of the most exhilarating moments of your life. You have spent over a decade in school trying to work to make your dreams happen. Once you get to school, you realize that things are a little bit more expensive than you planned. It is hard to find a job that pays more than minimum wage, so you decide to take off your first year from work and just concentrate on school. After your first year, you decide to change your major and pursue another path.

That $15,000 in debt you built up will just have to wait.

Does this story sound familiar? Studies show that this is a familiar story for far too many students. Many times, students in high school spend more time planning their prom than their college financing options. Student loans were made with a good intention. The idea was to help all students get a good education, and this would help our country in the long run by having a well-educated populace. However, the student loan crisis is really affecting tens of millions of people across the country.

Income Based Repayment.

One of the most common ways to deal with student loans is to go to an income based repayment schedule. Although this sounds like a great idea, there are a lot of issues for borrowers. One of the biggest is simply that you never really pay off the debt, you simply are paying as little as your income allows until it is forgiven. Waiting ten years (or twenty for graduate loans) is not a good plan.

Instead, start planning before and while you are in college on how you are going to deal with this issue. Never let your debt build up over time, and any plan that relies on the government to bail you out is not a good one. If you have $200,000 in debt and only make $30,000 a year, this may be the only option for you.


Although it sounds simple, working while you are in school can make a major difference in your quality of life after.

For example, let's take two students who are at the same school. Student A works 20 hours a week at 10 dollars an hour. He makes $800 a month, or about $10,000 per year. Student B decides to take off from work and worry about his debt after graduation. Both students owe $30,000 upon graduation, but the first student saved 50% of his money from work. That student now has $20,000 to use to pay off debt assuming they both graduated in four years. If you are in school or plan on going, plan ahead to reduce expenses and make sure you work.

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