By Travis Hunt
travis.hunt875@csuci.edu
Higher education can be outrageously expensive. Financing the college journey can be tricky, but successfully managing your debt properly at the beginning of the venture can ease the pressure of payments in the future.
First of all, do not be afraid of debt; governments and corporations function with high debt ceilings all the time. In February this year, Market Watch reported that the United States federal government debt is over $20 trillion.
Last February the Motley Fool reported that Apple Corporation was over $100 billion in debt. Both of these entities are still alive and well, even though both of them have high debt liabilities. Debt is not the end of the world, as long as it can be managed properly.
There are alternatives to student loans that do not require the borrower to repay them. Some alternatives come in the form of scholarships and grants. Scholarships and grants are more like gifts rather than loans because you don’t have to pay them back.
CI’s Student Business Services (SBS) in Sage Hall provides excellent literature on the topic of student loans. Most of the information given to students about grants and loans come from this source.
Two alternatives that come in the form of grants are Federal Pell Grants and Federal Supplemental Grants. Neither one of the grants must be repaid. The requirement is that the applicant must be in exceptional financial need.
Other grants are the Teacher Education Assistance for College and Higher Education (TEACH) Grant, as well as Iraq and Afghanistan Service Grants.
TEACH grants are for undergraduate, post-baccalaureate and graduate students who want to have a career in teaching. The Iraq and Afghanistan Service Grants are for students whose parent or guardian died in the Iraq or Afghanistan wars following the events of 9/11.
CI offers scholarships both on and off campus. Additional information on how to apply for these scholarships can be found at csuci.edu, and you can access this information by typing in “scholarships” on the CI webpage.
The following page will list the names of several scholarships that students can apply for. The benefit of attaining as many scholarships as possible is that you don’t have to repay them. Using this tactic you can avoid student loans, thus minimizing the threat of student debt.
When it comes to taking out a student loan, do not panic. The SBS office has informational flyers provided by Nelnet, which offer several useful tips on how to navigate loans. Remember that there is a six-month period after graduation before payments start on subsidized loans.
When it comes to paying of these student loans, The Wall Street Journal suggests five major points on how to pay off debt: one, to borrow only what you need; two, to choose your payment method carefully; three, if possible make payments while still in school; four, make extra payments when possible; and five, to enroll in automatic debit.
Borrowing only what you need will ensure that you will not pay more in principle and interest than necessary. If you don’t need the full loan then pay the extra back, as it will reduce payments in the long run. The second point of selecting the payment plan is based on a case-to-case basis.
Federal and private loans offer different types of payment packages, so be sure to choose what best fits you. Paying a little bit in college, even a few dollars, will reduce the amount over time, and some private loan companies will even offer a reduced interest rate for students that pay while still in college.
Being able to pay more than the minimum some months will allow you to pay the debt quicker. There is also an option to have loan payments come straight out of your paycheck, sometimes with a reduced interest rate, and this can help prevent missed payments.
Higher education may be costly, but being able to calmly maneuver through the student loan process can help you save money.
