Matt D Murren

The Dangers of Student Debt: Knowledge is Power

Useful Information About Student Debt

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It sounds innocent enough.  You go to college with the help of a student loan which promises you won’t have to pay a cent until after you graduate.  Some even offer you a six month grace period to find a job and raise your income to match the payments you must begin making.  In theory, this sounds good.  In reality, there are hidden dangers which can quickly stack the odds against you without the proper preparation.

First, it is rare when people manage to land a job the day after graduation.  It may take several months, which doesn’t give you a lot of time to prepare to save up to begin paying that extra bill.  Next, there’s the rising cost of living.  Unless you plan on living at home, you’ll have to get a place of your own.  Most graduates are involved in a serious relationship and are considering getting married and starting a new life.  This means paying for utilities, cable, Internet…you get the picture.  Most entry-level opportunities don’t pay the big bucks, even if you’re going into a prestigious profession such as nursing or some other medical profession.  That comes with experience.  So you may find it tough to compensate for all these extra expenses.

Next, there’s the fact that the average person will spend 10 – 20 years paying off their student debts.  That’s an awfully long time to maintain an income sufficient to meet all 240 or so payments.  Most students already have other debts such as credit card payments, car payments, a monthly cell phone bill, and so on.  This will further add to the financial strain.

How do you avoid student debt? How do you keep from being overwhelmed by the costs of paying back loans after graduation?  Financial aid (grants, scholarships, etc.) is one way.  Saving before applying is another.  Debt consolidation can also help.  The best method of prevention is to make sure you have an effective strategy for finding a job in the profession of your choice after you earn your degree.  Student debt doesn’t have to mess up your future credit.  Play it smart—plan wisely.

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