What if college loans are my only financial aid options?
Dear Babs,I’m looking into financial aid options for next year, and I was wondering about college loans. Is it okay to pay for the majority of my education with loans? It seems like most of the scholarships available to me are too small, and I don’t have money saved. How much is too much loans?
-Loan-ly in Little Rock
—
Dear Loan-ly,
There’s no steadfast rule for how many loans to take out. Bottom line, you need a college education. So if you need to take out loans to pay for all of your tuition, it’s better to do that than to not go to college at all. However, finding money for college is rarely about all or nothing.
Loans can be a big strain on you financially, especially in an uncertain economy where you are not guaranteed a job after graduation. If you go to a private school, then taking out loans for your entire 4-year education can cost upwards of $160,000. In a typical, 10-year loan term (meaning you have 10 years to pay back your loan) that would mean that you would have monthly bills of about $1,841.29. Ouch!
If loans are the only way for you to pay for your education, than I would seriously consider going to a local state school, or even trying to live at home. It may not be what you had in mind, but try and remember that what matters is the degree, not necessarily the name on it. There are many good schools that are more affordable, and reducing costs now will save you the embarrassment of moving back in with your folks at 23 while you try and pay off your loans.
Good Luck!
-Babs
This entry was posted on Tuesday, July 21st, 2009 at 1:22 pm and is filed under Dear Babs, Financial Aid. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
