Summer vacation is wrapping up, and many of you or your children are beginning to think about getting ready to start or return to college. But there’s important homework to do before the semester begins.
Higher education is a major financial investment, and students can use the rest of summer to make sure that they’re investing smartly and planning ahead for the future. Without careful planning, some students can end up drowning in student debt. Here’s a look at some key factors to consider when making student loan and financial aid decisions.
High school students should start researching the types of financial aid that are available. Some financial aid is in the form of scholarships that don’t need to be repaid, but others are work-study programs or loans that will come due. Some are available directly via the college, while others are offered by businesses or the federal government.
Pay special attention to loans, because they aren’t all designed the same way. Compare terms, interest rates and repayment periods. And be especially careful with private loans, which don’t come directly from the federal government. Private loans often have more restrictions and higher interest rates. Students who do end up deciding to take a private loan should research the lender carefully beforehand – you don’t want to end up with a bad deal!
Use our student loan repayment calculator to help determine what you’ll owe once your loans come due. And don’t forget to fill out your FAFSA form if you haven’t already – you’ll learn how much federal financial aid is available to you. A FAFSA submission is free. If it’s not, you’re being scammed, and you should contact my office’s Consumer Protection Division by calling 1-877-5-NO-SCAM.
When you’re putting together a repayment plan, consider the factors that apply to your personal career goals. If the job you want to have doesn’t pay enough to pay back your loans, then you should think hard about your plans. So research how much you can expect to earn in your field and how quickly you should be able to find a job after you graduate. These answers will help you better understand how much you can afford to borrow in student loans and be able to repay in a timely manner.
While in college, students should start making smart decisions to manage finances. Identify financial goals, create and stick to a budget, and begin building a strong credit history. The financial decisions young people make in college will help protect their credit and save money to help reduce student loan debt after graduation. And we should all make sure to protect our finances by checking our credit and taking steps to protect ourselves from identity theft.
One of the most important visits a college applicant, student or recent graduate can make is to their college’s financial aid office. Financial aid officers can provide advice specific to each student and each school. They’ll be able to answer questions, help set financial goals and share resources to plan ahead.
Attending college can be a huge step into a young person’s future. But it’s a major financial investment, and it should be made thoughtfully. Visit my office’s website at www.ncdoj.gov to get more information on college financial planning. Good luck to everyone thinking about, starting or continuing their education in the fall.
Josh Stein serves as North Carolina Attorney General.