Paying Back Student Loans Starts When You Sign Up For Them

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I sat with a younger relative as we went through the approval process for her to get her student loan.  While we had several specific questions about the process, the main point the computer module wanted to teach us was that the loan needed to be repaid.  I guess that just is not as commonly understood as it needs to be for all who approach this process.

The time to really consider student loan repayment is as you are going through that module and dedicating yourself to the loan.  You need to have a plan for where that money is going to be coming from in the future.  They say the here and present is all that most college students are prepared to handle.  That is perhaps why student debt is so out of hand.  However, if we truly want to give sound advice for helping students get out of debt, we need to honestly consider how they got there.  It is not all about greedy lenders, some of it comes back to the practical questions we do not want to ask anymore.  The most basic, how will you pay this money back?  That question relates to cars, student loans, and anything else for which you are borrowing money,  It deserves real, careful, consideration, not a shrug, a vague answer that you will deal with in the future, or some how you are sure you will make money to cover it.  If you truly believe that everyone who graduates with debt is making it just fine, because their incredible salaries more than cover the debt, I suggest you contact some of the suggested alumni that most schools give to prospective and even current students.  Talk with them about their student loan debt.  The ones you will find the most helpful are ones who were not privately wealthy.  Look for ones who did graduate from college without spending the next ten to twenty years up to there ears in college debt.  If they did it legally, those are people you may wish to have conversations with regarding your options.

When you choose a major, a school, and your debt package, you already have to be thinking about debt repayment.  The biggest mistake people make regarding student loans is ignoring them, pretending they can be dealt with after graduation.  They will be dealt with after graduation that is a certainty.  The question remains, will you be in a position to deal with them?  If you are going to school to become an educator, it is an honorable profession.  However, the markets are often tight and if you are fortunate to land a job, how much of your first salary will be devoted to your student loans, leaving you with what financial resources to live with for the rest of your needs? 

This question often elicits anger.  Some, students only want to concentrate on the positives of choosing a major, being accepted to a wonderful college, and would prefer to deal with the stress of finances later.  Those who choose not to deal with the situation now unfortunately don’t always get the freedom of options later.  They are constricted as to what level of pay they must earn in order to make ends meet, even when living on a strict, tight, budget.  The loan payments have to be paid, regardless of what else you can cut out of your budget, so your job options must include a certain level of income to insure those obligations are met.  This can mean delaying home ownership, not accepting preferable job opportunities, moving, going back to school and the list continues.

There are lots of people who will work with students once they have the debt.  We do need to do more work with all students in understanding how student debt is directly related to future income, opportunities, and freedom.

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