College debt is common; debt management can help you handle it

An Oct. 2007 USA Today article noted that in-state college tuition fees were up 6.6 percent from the previous year. The article also stated that about two-thirds of all college students received some form of financial aid. Therefore, borrowing to go to college is the exception, not the rule. And with Pell grants and scholarship money awards on the decline, more and more students must take out loans that they are required to repay - on schedule, in full. Many college graduates opt to enroll in credit counseling sessions or formulate debt management plans to help them pay off student loans. 

If you are a high school senior or an adult returning to school you will want to understand how much you are borrowing to attend school and how the loan repayment process works. A Nov. 2005 BusinessWeek report demonstrates that federal student loans have better interest rates and better repayment options than private loans do.  

Visit http://www.fafsa.ed.gov/ to fill out a 'Free Application for Federal Student Aid' -- but before you do, take some time to learn more about the process of borrowing for college by exploring the Web site. To get additional information about school financing options or to apply for private loans -- you can visit Sallie Mae at http://www.salliemae.com. 

Sallie May recommends that you approach the college loan borrowing process using the following steps:

-Apply for scholarships and grants, which do not have to be re-paid.

-Apply for federally backed student loans.

-Apply for private loans last.

You have several options for arranging college loan repayment, as well. You can set your loans up on a regular repayment plan, which will require you to pay the same amount each month through the term of the loan. Higher payments each month mean that the loan term will be shorter, and you will pay less in interest overall. Lower monthly payments mean a longer loan term length and higher interest rates.

Loan repayment terms can be set up to fluctuate, as well. You can arrange to pay off your loans in graduated increments. The monthly amount you owe will be quite low at the beginning, and will grow over time. The theory behind this scheduling assumes that you will earn a higher income as your career progresses, and will thus be able to handle higher payments. You can also set up your loans to match your income, paying a certain pre-determined percentage of your income each month.

Before you graduate, you should consider enrolling in a free in-house or online credit counseling session with Advantage CCS. You will learn what steps you can take to make the loan repayment process more manageable. In credit counseling, you might create a debt management plan, which will allow you to pay off your loans while managing other expenses - including rent, food, and transportation - on a new grad salary. Give Advantage CCS a call!