Sense & Centsibility Blog

Mastering Student Loans: Know Before You Owe

Student loans remain a hot topic... and will for years to come. So we're flashing back to Barb's post with how to prepare for and deal with student loan debt.

As a financial counselor, I have observed a few disturbing trends with student loan borrowers. I would like to share some of those with you, along with some tips for avoiding over-borrowing student loan debt.

Otherwise, you might just sabotage your financial future. By this I mean you will owe so much in student loans you won’t be able to afford (or qualify for) a home mortgage or auto loan.

Trends to Avoid:

  • Most soon-to-be college students don’t understand the true consequences of borrowing money
  • Many parents don’t understand the true consequences of borrowing money
  • Both students and parents borrow far too much
  • Letting your student loans go to default
  • Enrolling in a graduate school program to avoid beginning student loan repayment
  • Not saving money for your college education

Before You Borrow:

There are several websites that provide helpful, detailed, and accurate information about student loan borrowing. Both students and parents would be wise to explore this information together. And do so BEFORE borrowing any money so you know what you are getting yourselves into. However, if you are already in repayment, you can still benefit by reviewing this online information.

One of my favorite websites is Student Loan Borrower Assistance. It offers extensive information about federal loans, FAQs, repayment options, and a wide array of topics that may never have occurred to you.

This is a consumer friendly resource that is offered by the National Consumer Law Center, a well-respected and trusted consumer advocacy organization.

Another helpful resource is the student loan website offered by the Department of Education. Again, these resources can help you gather and assess important information about student loan borrowing so you can make the best decisions about your education and how to pay for it.

While You’re in Repayment:

If you are approaching or are already in student loan repayment, the following websites may also be helpful.

  1. offers excellent information about options for repayment plans and calculators to estimate monthly payments.
  2. The National Student Loan Data System website offers information about your federal student loans including how many, the types of loans, balances owed, and so forth. This is the starting point for determining which repayment options are available and affordable for you. You will need your 4 digit FAFSA PIN number to access your loan information. If you no longer have your FAFSA PIN, you can request a duplicate at the home page.
  3. Visit StudentAid.Ed.Gov if you are already in default.

Helpful Tips For Borrowing:

Research your intended major or targeted job industry

  • Whatever your interests, you are looking for a growing and stable job market. When you graduate, you want to land a job as soon as possible in your chosen field. I am NOT telling you to abandon your dreams. But if you plan to borrow thousands of dollars in student loan debt, you better pick a job that allows you to repay those loans.
  • Before enrolling in a college program, work as an intern in a business that you are interested in. Another idea is to interview, or shadow business owners and their employees in that particular industry. You are looking for a realistic picture of what this type of job is really like. The last thing you want to do is go to school (and borrow money) for a job that doesn’t suit you!
  • Research the average starting salary or wage for this industry so you have realistic expectations.
  • Consider attending your local community college to complete the program’s general requirements; then transfer to your “dream school” to get your degree.
  • Consider a technical degree from a local community college to get started. This will allow you to earn a living while you ponder further education.

Have a plan

  • Apply early for grants, scholarships, and loans.
  • Use the online calculators found at the above websites to determine an affordable loan payment BEFORE you borrow any money.
  • Whenever possible, stick to federal student loans which offer better repayment options.
  • Don’t plan on getting a “good job” to repay high student loan debt. You just graduated and likely have little (or no) experience in your chosen field. Who do you think will pay you big bucks under these circumstances?
  • Don’t go to college to “find yourself.” Wait until you determine your career path. A college degree is too expensive to experiment with your financial future.
  • NEVER borrow more money than you need for school.
  • Don’t rely on your college placement office’s promise to find you a job when you graduate.

Work part-time

  • Employers like to hire people who have worked in the past. This shows you can handle responsibility and prioritize important tasks. Otherwise, employers may be unwilling to “test drive” you by hiring you for your first job right out of college.
  • Student loans are NOT intended to fully support you while you go to school. Don’t live on student loan money because it will disappear quickly and loan balances will soar!
  • Reduce living expenses while in school. For example, live at home if at all possible.
  • Find out the minimum general education requirements in your field. Then, go to school to get those credentials. Next, look for employers who offer tuition reimbursement to continue your education.
Here at LSS, we want to see you succeed! With a bit of research, planning, and identifying your true passion BEFORE you borrow money, you can be the master of your student loan debt, instead of the other way around.

Call LSS 888.577.2227 to schedule an appointment with a Financial Counselor who can help you create your monthly spending plan, pay off debt, or achieve another financial goal. Don’t wait to improve your financial future — take action today!

Want to get started creating your monthly spending plan right now? Just click here. 

Author Barbara Miller is a Certified Financial Counselor with LSS.