With federal student loan interest rates set to rise this coming academic year, paying for college is becoming increasingly difficult—and many are wondering, “is it still worth it?”
The answer, according to a recent analysis by the Federal Reserve Bank of San Francisco, is still a resounding “yes.” The study found that college graduates not only start their careers with higher annual earnings, but also experience more rapid growth in earnings than others their age with only a high school degree. This evidence shows that the value of a college education rises over a worker’s life, resulting in the average college graduate earning over $800,000 more than the average high school graduate by retirement age.
That’s good news, but the prospect of taking out those student loans is still daunting, and merits intentional planning up front. While Congress debates the possibility of federal student loan refinancing for current borrowers, there are some steps you can take to ensure the greatest return on investment in your education. We’ve found some practical advice from around the web:
Offset Educational Expenses
Before taking out loans, exploring ways to minimize costs altogether is beneficial. Forbes suggests eight tips for taking out student loans, including mapping out a degree from start to finish and planning course loads to spend fewer semesters in school.
Plan Ahead With a Student Loan Calculator
Taking the time to think about the amount of debt necessary to incur to pay for school, what sort of salary might make the debt affordable, and all the different repayment options helps many students before deciding the right amounts to take out for a loan.
[New York Times]
Make Interest-Only Loan Payments While Still in School
Borrowing student loans means paying back principal and interest, and for unsubsidized Stafford loans, interest begins accruing from the time they’re first disbursed. Making interest-only payments while still in school saves on the total student loan balance.
[U.S. News and World Report]
Paying for college isn’t getting any easier, but there are still some ways to mitigate the expenses. Do you have any personal budgeting tips for managing college debt? Please share them with us!