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3 Things You Need to Know About Student Loans

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When I graduated college, it was with $66k in student loan debt (I’m still paying it off, by the way). In reality, I probably only needed $20k – $30k for my degree. How did my loans get that high? I thought it would be a good idea to finance my lifestyle at the time. Expensive trips, clothes and shoes, fancy dinners, anything you can think of, student loans paid for it.

When I started, I didn’t take the responsibility of federal loans seriously. To me, it was something that Future Me would deal with. Well, I’m Future Me now, and I’m paying for Past Me’s irresponsibility. Don’t make the mistake that I made.

The college years are the last truly carefree time of your life before real adulting begins. It can be easy – almost too easy – to get a student loan. For most college students, it’s the first debt that goes on your credit report. There are a few things I’d like to teach you about student loans that you need to know before taking the plunge.

College is expensive and student loans can help ease the burden of paying for your education. If you truly need them, go ahead and get them. However, if you decide that is the best option for you, be sure to take out what you need and no more. No sense in getting yourself in an unnecessary hole like I did.

But before you sign on that dotted line, make sure you know these three important facts.

1. Student Loans Are Adult Debt

As easy as student loans are to obtain, they can be equally as (if not more) difficult to pay off. The repayment process kicks in and the first payment becomes due as soon as six months after your college graduation. Keep in mind that the payments become due whether you land a job or not.

There are deferments you can ask for that temporarily postpone payments, but interest keeps adding up during the deferment.

You’re completely responsible for that debt (as is anyone who co-signs for you), and if you don’t pay, the government can garnish your wages. Hopefully you never find yourself in that situation. Student loans are typically long term debt, and are usually paid over the course of several years.

Fortunately, if you do find yourself with student loan debt, there are ways that you can pay off your student loans quickly. One of the best ways is to find ways to make extra money on the side. Do side hustles, sell stuff, do whatever you have to and put every extra penny to those loans. My goal is to have my loans paid off by January of 2019.

2. Student Loans Never Go Away (other than a few exceptions)

No amount of begging, pleading or bankruptcy can get rid of student loan debt. If you default (stop paying) on student loans, debt collectors will start calling and writing, your paychecks can be garnished, and your tax refunds can and will be snatched until the debt is paid. In addition, your credit will be ruined. That will make it hard to get a credit card, rent an apartment or buy a house.

student loans

Student loans are currently only forgiven in one of three instances: death, permanent disability, or via the Public Service Loan Forgiveness (PSLF) program. Hopefully you’re not banking on either of the first two options.

For the PSLF option, if you work full time for a qualifying employer in the public sector, such as a teacher, you can have your loans forgiven after 10 years of consecutive payments.

Other than that, you’re stuck with those loans. And the payments will only get more difficult to manage the more responsibilities you have, such as a mortgage, or a family. Also, if you have a parent or someone else cosign for your loans, they’re on the hook too, until they’re paid.

3. There Are Other Options

Try to think of student loans as a last resort, rather than a simple solution. The process of getting loans is simple, but the payback process can be overwhelming. Look for scholarships and grants (money that doesn’t have to be paid back) that help cover the cost of your education. Also, you don’t have to be a straight A student to qualify for every scholarship.

There are scholarships out there for almost everything. Also, consider attending a community college for the first two years. You’ll get most of your prerequisites out of the way at a fraction of the cost.

Student loans are there if you need them. Be careful, though, because the debt you incur as a teenager right out of high school can follow you around for the rest of your life. Choose wisely, and, seriously, look into those scholarships. There’s even one for creating a sandwich and one for wearing a duct tape dress to your prom.

The good thing about scholarships is that they can add up quickly, you can get more than one, and you can stack them on top of each other and use as many as you receive without graduating with a ton of debt!

See my related post on saving money on college costs for more tips on saving money on your education.

1 Response
  • Willow
    March 28, 2017

    This is so true! Will definitely be using these tips

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