Graduate School Info Menu

Graduate School Info
View Latest Posts
View Subscriptions
Posting Instructions

Active Bloggers

Reg culpepper Reg culpepper
class of
Reggie Culpepper Reggie Culpepper
Clark Atlanta University class of 1998
Will Moss Will Moss
Hampton University class of 1995
Maria Luisa Maria Luisa
class of
Elynor Moss Elynor Moss
North Carolina Central University class of 2003
Tamara Hill Tamara Hill
Jackson State University class of 1994
HBCU CONNECT HBCU CONNECT
Central State University class of 1995
Beverly Johnson Beverly Johnson
class of

Responsible Student Loan Borrowing

Responsible Student Loan Borrowing
Posted By: Elynor Moss on March 26, 2018

Student loans may be good debt because they are an investment in your future, but too much of a good thing can hurt you.

Students who graduate with too much debt are often forced to delay “life cycle” events, such as buying a car, getting married, buying a home, having children, saving for their children’s college educations and saving for their own retirement. A May 17, 2012 Pew Research Center report, College Graduation: Weighing the Cost … and the Payoff, found that a quarter of student loan borrowers said that their student loan debt burden affected their career choice and made it harder to buy a home, and 7 percent said that repaying their student loans lead to delays in getting married and starting a family. A 2002 student loan survey by Nellie Mae, College on Credit: How Borrowers Perceive their Education Debt, reported that 17 percent of respondents changed career plans because of student loans, 38 percent delayed buying a home, 30 percent delayed buying a car, 13 percent delayed moving out of their parents’ home, 14 percent delayed getting married and 21 percent delayed having children.


There are several good rules of thumb for borrowing responsibly. These rules of thumb discuss how much to borrow (or how little to borrow) to ensure that the loan debt burden will be affordable.

•Total student loan debt at graduation should be no more than the borrower’s annual starting salary. If total student loan debt is less than annual income, the borrower will be able to repay his or her student loans in 10 years or less. If total student loan debt is more than the borrower’s annual income, the borrower will struggle to repay the loans and will need an alternate repayment plan to afford the monthly loan payments. Alternate repayment plans, such as income-based repayment and extended repayment, reduce the monthly payments by stretching out the term of the loan and, hence, paying more total interest over the longer period of repayment. This means that the borrower will potentially still be repaying his or her student loans when the borrower’s children enroll in college.

•Live like a student while you are in school, so you don’t have to live like a student after you graduate.



•Before using student loan money to buy anything, ask whether it would be worthwhile at twice the price. Every dollar of spending with student loan money will cost about two dollars by the time the debt is repaid. For example, if a student buys a $10 pizza a week, that will total about $2,000 over a 4-year college career. If the student uses student loan money to pay for the pizza, it will cost about $4,000 by the time the debt is repaid. That’s a lot of pizza.

•Don’t treat loan limits as targets. Borrow as little as possible. Every dollar spent repaying student loans is a dollar that is not available for other priorities.

•Devoting 10 percent of monthly income to repaying student loan debt is manageable. Devoting up to 15 percent of monthly income is the practical stretch limit, if the borrower adopts an austere lifestyle. Default rates increase as the debt burden increases as a percentage of income.

•Parents should borrow no more for all their children than they can afford to repay in 10 years or by the time they retire, whichever comes first.

To estimate debt at graduation, multiply first-year debt by the length of the educational program. This figure should be within about 15 percent of the actual total. For example, if a student borrows $7,500 during the freshman year in college, the debt at graduation will be around four times as much, $30,000 plus or minus $4,500, when the student graduates with a Bachelor’s degree in four years.

To estimate income after graduation, use the median income figure for the occupation in the statistics published by the Bureau of Labor Statistics. The U.S. Census Bureau has also publishes statistics on income by undergraduate major. This data has been analyzed by the Center on Education and the Workforce (CEW) at Georgetown University. In particular, the CEW report The Economic Value of College Majors provides charts mapping from undergraduate majors to income after graduation and the report Hard Times (2013 update) adds data on unemployment rates by undergraduate major. The National Association of Colleges and Employers (NACE) publishes annual surveys on starting salaries for college graduates.


https://www.edvisors.com/college-loans/
If you enjoyed this article, Join HBCU CONNECT today for similar content and opportunities via email!
Comments
Please Login To Post Comments...
Email:
Password:

 
More From This Author
Accept your invitation to become a new hire at an Employer in your field of expertise!
#FAMUConnect: Who do you know from FAMU? We introduce you to Mr. Shaun Watson
#HBCUEmployment: Opportunities are available! Seek a new career here...
Connect with the HBCUConnect representatives for help attaining a career in Healthcare, Education, and Technology
Careers for professional talented workers: applicants invited to apply to the following new employers
Working on attaining a new career requires options. Research the jobs on this list to see if you want to apply!
Latest Graduate School Info
5 Great Tools to Help With Your College Studies

5 Great Tools to Help With Your College Studies

If you’re a college student who wants to get ahead in your studies, there are tools that are available to help you advance. Taking advantage of these resources can help you stay better organized ...more
Anthony Christensen • 295 Views • June 26th, 2020
International Conferences Can Improve your Writing A Lot

International Conferences Can Improve your Writing A Lot

BY LINDA ANDERSON Conferences are a great place to not only learn new things and hone your skills but also to meet others who are from the same craft as you are. Something that is important in a st ...more
Elynor Moss • 2,025 Views • June 6th, 2018
Never procrastinate and always free time…..

Never procrastinate and always free time…..

One blog I read regularly is by Leo Babauta, called zen habits. Essentially, he writes all about simplifying your life. A while ago, Scott Young was a guest blogger for Babuata’s website and wrote a p ...more
Elynor Moss • 5,164 Views • April 19th, 2018
Coping strategies for full time workers turned PhD students

Coping strategies for full time workers turned PhD students

By Thesis Whisperer Have you given up a great full time job to do your PhD? Some of you might have done this fairly recently – what changes can you expect? Jo Khoo is currently enrolled ...more
Elynor Moss • 2,333 Views • April 19th, 2018
How Academic Parents Can Find Time to Exercise

How Academic Parents Can Find Time to Exercise

A question that often comes up when I do campus workshops on work/life balance is how and when busy academic parents can find time to exercise. As we get older, it becomes increasingly important for u ...more
Elynor Moss • 4,548 Views • April 19th, 2018
Popular Graduate School Info
People Judge Your Intelligence Based on the Tone of Your Voice and How Fast You Speak

People Judge Your Intelligence Based on the Tone of Your Voice and How Fast You Speak

Do you want people to think you are intelligent? Has someone ever told you “You’re much smarter than you look.”? No doubt it can sting to be perceived as less intelligent, particularly when you ...more
Elynor Moss • 11,385 Views • June 12th, 2017
How to Improve Your Reading Comprehension

How to Improve Your Reading Comprehension

If youd like to improve your reading comprehension, try the SQ3R method. This is an acronym that means: Survey, Question, Read, Recite and Review. Heres how it works: Survey Your Text Prior t ...more
Elynor Moss • 10,732 Views • June 12th, 2017
Never procrastinate and always free time…..

Never procrastinate and always free time…..

One blog I read regularly is by Leo Babauta, called zen habits. Essentially, he writes all about simplifying your life. A while ago, Scott Young was a guest blogger for Babuata’s website and wrote a p ...more
Elynor Moss • 5,164 Views • April 19th, 2018
MVSU to host Graduate Expo March 1

MVSU to host Graduate Expo March 1

Why should you consider an advanced degree? How will you finance your graduate education? What program of study is the best fit for you? For the answer to these questions and many more, attend Mis ...more
Elynor Moss • 4,715 Views • February 27th, 2018
How Academic Parents Can Find Time to Exercise

How Academic Parents Can Find Time to Exercise

A question that often comes up when I do campus workshops on work/life balance is how and when busy academic parents can find time to exercise. As we get older, it becomes increasingly important for u ...more
Elynor Moss • 4,548 Views • April 19th, 2018
Please Give Us a Like on Facebook!