The cost of higher education can empty your savings account and leave you buried in debt before you ever cross that stage to accept your diploma. AOL reports that the amount of debt owed in student loans now tops the amount of credit card debt Americans are saddled with. Americans currently owe $829.8 billion dollars in student loans, $300 billion of which has been taken out in the past four years.
An Associated Press-Viacom survey shows that nearly half of students polled are uncomfortable with the amount of student debt they hold. The survey also found that students are more likely to consider dropping out of college because of money trouble than bad grades.
Before you begin to evaluate schools and programs, take a minute to look at the different ways you can finance your degree. Federal loans are available for students based on need. If you want to take advantage of them, you’ll first need to complete a FAFSA form. Often, especially if you are attending college in another state, the federal loans offered will not cover the cost of tuition, room and board and student fees. Many banks offer students private loans which, unlike federal loans, are based on credit-worthiness. Another option is to pay for college on a credit card to finance your education on a monthly basis. But bear in mind that your eligibility for the lowest interest rate and highest credit limit on a credit card is likely to be dependent on your credit scores.
Will you need to take out loans or pay for college on a credit card? Be sure you know your three credit scores you check your updated credit scores each month at FreeScore and track changes to your credit profile with FreeScore’s automatic credit monitoring feature, you shouldn’t be surprised at the rates offered you on loans and credit cards. Being able to see your scores and work on a plan to get the most out of them before you start applying may give you access to better rates and terms, saving you money and sparing you headaches in the long run.
How did you finance your education? Did the cost of college alter your plans for undergraduate or graduate degrees?
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