The Latest News on Freeing Yourself from Student Debt

[May 10, 2007.]

 

Now that tax season is officially over, many Americans are taking stock of their finances once again. That includes the nation's college students, who face particular financial challenges in 2007. Financial experts are offering the following tips this spring for helping students to avoid the pitfalls of excessive student loan debt:

• Paint yourself a complete financial picture. Figure out exactly how much you owe in student loans, what your interest rates are, and what your monthly payments are likely to be. You can find information on your federal student loans from the National Loan Data System.


• Consider paying on your student loans, or at least your interest, while you are in school. Delaying payments until after graduation may only delay your financial pain. You may actually be in a better position to make student loan repayments while in school as opposed to after you leave your alma mater.


• Experts say good money management means paying off your highest-interest rate loans first. In the long run, you'll end up saving money that way. Just for your information—Stafford Loans and PLUS Loans tend to have lower interest rates, so you might want to consider obtaining those in preference to other types of loans.


• You should also consider taking advantage of all the possible benefits offered by your lender. You may be able to reduce your interest rate by agreeing to monthly debit payments or enrolling in some other kind of special loan program.

Take time to investigate student loan consolidation or refinancing. Such tools have become increasingly popular ways for students to rein in their educational debt. Financial experts say you may be able to save thousands of dollars this way. You can combine your payments into one low monthly payment, obtain discounts on your interest rate, and other perks.

Julie Ann Amos
May 10th 2007
Related News:

• Universities Opt to Stop Sharing in Student Loan Profits
  A number of universities are signing codes of conduct promising that they will not agree to revenue-sharing with student loan companies. The educational institutions have also pledged not to accept any gifts, meals, or trips from lenders. [May 9th 2007]


• Lawyers Join the Debate Over Student Loan Industry Practices
  As states such as New York and Illinois and bodies such as Congress and the U.S. Education Department investigate practices by the student loan industry, class action attorneys are also entering the mix—not to anyone's surprise. [May 6th 2007]


• Student Loan Xpress Becomes One of the Nation's Largest Lenders
  Student MarketMeasure, Inc., a student loan information service, has announced that Student Loan Xpress has become the 8 th largest federal student lender in the U.S. [May 4th 2007]


• Lessons in Managing Student Loans
  Unfortunately, it’s easy to find yourself mired in student loan debt once you embark on your college career. Because of the high cost of tuition, housing, food, clothing, books, and other supplies, you may be tempted to rely almost exclusively on student loans to finance your education. [May 3rd 2007]