This article over at FreeMoneyFinance really got me thinking about my student loan debt. The fact is that I have three different student loans right now (and that's after consolidating several years back). But the reality is that I still regret not paying more down on them. I know that I didn't totally mess up, but I feel like much of the struggle that I am in right now (and it isn't as bad as I am making it sound) is that I didn't get rid of the loans when I should have and instead I spent too much money on "stuff". I don't really regret anything that I bought, but I feel like I should have been able to retire that debt sooner.
The lessons I've learned, and I hope to pass on to other people that are taking student loan debt are the following:
1. Find out how much money you will owe. (do this while you are in school.)
2. Figure out whether the interest rates are fixed or variable.
3. Check with your financial aid rep to find out what loans are federally subsidized and which ones arent. You want as many federal loans as possible so that they are eligible for consolidation.
4. Go for consolidation fairly soon - and try to lock in a good fixed-rate. Also make sure you don't go for those graduated or balloon options unless you have to. That is money that you will spend on other "stuff" but it will cost you thousands of dollars in interest and lost opportunities over the long haul
5. Don't stress out over the loans unless you are majoring in something that won't be able to pay the bills. Pick a major or business that you can actually afford to support yourself doing. This may not be the "find yourself" attitude that some people have, but I am a pragmatic person. And I am glad that I did computer science and economics not just a foreign language. :)
6. Start paying extra on the loans immediately. Work a second job if you have to. (but don't do this at the expense of your 401k or roth. Those are more important.)
7. Get amortization schedules frequently so you know how much of each payment is interest, and how much of each payment is principal. that is a great way to stay motivated. It will also show you how long it will take to pay off the loan unless you pay extra.
The lessons I've learned, and I hope to pass on to other people that are taking student loan debt are the following:
1. Find out how much money you will owe. (do this while you are in school.)
2. Figure out whether the interest rates are fixed or variable.
3. Check with your financial aid rep to find out what loans are federally subsidized and which ones arent. You want as many federal loans as possible so that they are eligible for consolidation.
4. Go for consolidation fairly soon - and try to lock in a good fixed-rate. Also make sure you don't go for those graduated or balloon options unless you have to. That is money that you will spend on other "stuff" but it will cost you thousands of dollars in interest and lost opportunities over the long haul
5. Don't stress out over the loans unless you are majoring in something that won't be able to pay the bills. Pick a major or business that you can actually afford to support yourself doing. This may not be the "find yourself" attitude that some people have, but I am a pragmatic person. And I am glad that I did computer science and economics not just a foreign language. :)
6. Start paying extra on the loans immediately. Work a second job if you have to. (but don't do this at the expense of your 401k or roth. Those are more important.)
7. Get amortization schedules frequently so you know how much of each payment is interest, and how much of each payment is principal. that is a great way to stay motivated. It will also show you how long it will take to pay off the loan unless you pay extra.
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