Last week, we discussed how college teaches real-life lessons about financial planning, emphasizing that figuring out how to manage money can set one up for fiscal responsibility during the college years and beyond. But some people derail their lives before classes start by taking on more student loan debt than necessary. Bankrate.com is one of many media outlets to report that student loan debt has caused some people to alter life plans. According to a Bankrate Money Pulse survey:
“45% of Americans with student loans, and 56% of those between 18 and 29, have put off a major life event because of the burden of that debt. Part of the problem could be that more than half of student borrowers who were surveyed, and 2/3 of millennials in that group, say they didn’t receive enough information or advice about the financial risks.”
Adults dealing with student loan debt they cannot handle are postponing major life events such as getting married, buying homes and cars, and having children. They are also ignoring their need to save for retirement. While these adults are struggling with their debt, these postponements also have repercussions for their communities.
Experts quoted in the article suggest loan consolidation to get a lower interest rate and finding out if you are eligible for loan forgiveness if you work in the private sector. They also suggest something that many are already doing: live with your parents until you can get a handle on your finances.
And remember, a Fee-Only financial planner may charge based on your income so you can get the expert help you need.
If you have yet to take out loans, you are in a position to educate yourself and avoid being burdened by student loan debt. Here are some suggestions:
- Choose an affordable college
- Put the effort in to find scholarships
- Shop around for the best interest rate you can get
- Raise your credit score to become eligible for better student loan terms