Many college students wonder why they should even consider investing in the market when they are still in college. College is expensive and paying for it can be very difficult for people, so even considering investing is a crazy thought for many students. If you’re fortunate enough to have scholarships, grants or parent help you may have extra money that you’re not putting towards your education.
There will essentially be no other time in your life when you’re not required to pay rent, pay for groceries and utilities. This extra money should be used to plan for your future, and by investing money you’re setting up a great fund for your future.
Investing requires a lot research, knowledge and discipline. Students would best served by going to a financial advisor. The advisor can help them decide how much to invest, the type of investment and advise them how to monitor the market and make choices regarding their investment.
Before meeting with an investor, it’s wise to brief yourself at least a bit about the investment journey. Here are a few steps about starting the journey:
These steps will help to prepare you to invest your extra money, and start making a profitable future before you even graduate. This is a sure fire to hit the street running, and start a journey to a successful life as a working and profitable adult. Before investing be sure to do research about all of your choices. While investing as a student can be quite profitable, it can also be quite intimidating. Knowing your options and knowing how to increase your profit will go a long way in your investment journey.
The American student loan debt has risen in the past decade from $240 billion to $1.2 trillion with the average graduate exiting school having approximately $29,400 in student loan debt, with government and private student loans. Such a rapid increase has mimicked the housing market bubble and the steady increase has many wondering if the higher education bubble will soon pop as well.
Is History Repeating Itself?
With the high national average of student loan debt, that number is expected to rise by 6 percent each year. These loans students secure are similar to the mortgage loans that left many homeowners, without a home. Of the $1.2 trillion in student debt, about $1 trillion is comprised of Federal student loans. With interest rates climbing on both private and federal loans, students are expected to pay much more over the coming years.
The Bubble May Not Pop
However, students are still graduating in an economy, though improving, still has left many unemployed. Students and their families are realizing that because they seek out higher education opportunities does not mean they will secure a job where they can make affordable payments. Students are now either waiting until they can find affordable options to continue school or finding alternate methods. So, private lenders have changed their lending standards and loans are not as popular. So some would say, the bubble has stopped growing or already has burst.
There however is a way students can receive their education and avoid the higher education bubble all together. They can get a budget together while still in high school. This helps planning to be easier. They can apply for scholarships, grants, and negotiate with schools for reduced to no tuition rates. Also, they may inquire about work-study opportunities on campus while living at home to decrease the cost of living. If they must take a loan, they should pay the interest while in school so the bubble doesn’t grow.
With so much student debt, there are actually many ways students can pursue their education and avoid getting loans way over their head. The following methods include loans, scholarships, grants, and donations.
Peer-to-peer funding has been around for some time, but more so thought of for businessloans. This is an excellent alternate method to finance one’s education. They have low fixed rates varying from 6.73% to 9.36% APR. There are no hidden fees and it’s an easy application. Prosper and the Lending Club are two well-known Peer-to-peer funding lenders.
College Debt Solution also offers some Peer-to-Peer lenders they partner with. Borrower’s present their case and a lender or lenders pitch in what they can to create a win-win situation for a
Find a Benefactor.
There are many well-known programs, such as the National Health Services Corps, AmeriCorps, ROTC programs, and the Peace Corp that have programs set up to forgive student loan debts in exchange for their service commitment over a course of a few years. Other programs exist as well such as with nursing opportunities or for teachers teaching in inner city school systems.
Get a Non-Traditional Scholarship
Instead of applying for scholarships based on need, racial backgrounds, or academic achievements, you can apply for a non-traditional scholarship. Look into out of the ordinary requests such as unique designs for fashion school or a scholarship where you volunteer to help an exotic cause.
Check Out Alternate Social Media Sites Methods
You can turn to social media sites such as Edulender and Sponsor My Degree to see if you can have others sponsor your education. Set your profile up and request donations for school on your Twitter, Facebook, and LinkedIn sites.
With the cost of college rising every year, students are faced with the dilemma of choosing quality education and obtaining a lifetime of debt. Students are starting to question if a college degree is really worth the cost of paying for that degree over their entire adulthood.
Another important factor in the discussion about the affordability of education is that the unemployment is so high in today’s economy-that many college graduates cannot get a job. It’s much harder to pay back student loan debt, when one has no income to do so. Many college graduates are forced to work part time jobs, which barely cover living expenses, much less student loan payments.
But there is still much research that indicates that there is a definite gap between college and high school graduate earning levels. College graduates make about $17,000 more than those with only a high school degree. There are not as many high paying jobs available in today’s workforce, which do not require a college degree. High school graduates are left with service, retail and blue-collar jobs that usually do not pay as much as business, healthcare, law or education jobs of college graduates.
Most high school graduates will simply not have as many opportunities to make a high salary with the jobs that are available to them. Even working as an executive assistant or secretary can require a college degree in today’s economy. It’s clear that obtaining a college degree increases one chances of becoming a higher income earner and finding a career that will bring about future advancement and raises.
Young adults also have the option of attending trade schools or earning a two year degree. These options may be cheaper for students who have chosen career field or whom cannot afford a four year degree. Students will have significantly less debt, but often can make a higher income than high school graduates with no further education.
With student loan debts possibly being over $30,000 once a student graduates, it’s important to plan ahead of how to successfully pay off your student loan debt and not feel the financial pressure. Here are a few techniques to successfully manage your student loan debt.
Get an Accurate Measure of Your Debt
Before you graduate from school, calculating your total and up to date balance can keep you in the loop of how much you have borrowed and what you are looking at being responsible for paying back. If you are starting after you have completed school, do so as soon as possible.
Contact your school and ask them to send you a copy of your financial aid history. This will have each disbursed loan and grant amount sent to the school. You can also ask your lenders for a copy of your account balance. Finally, log onto the National Student Loan Database (NSLDS) to pull your electronic history of your disbursed financial aid. Be sure to contact any private lenders as well to get their copies. Now compare the three and verify the accuracy of your account balance. If there are any inaccuracies, contact the lender as soon as possible to get everything straightened out.
Create Your Financial Plan
Now that you have calculated all of your loan balance, you can create yourself a budget. The true budget needs to consist of your student loans, current living expenses, and any additional debts. However, first we will just calculate your monthly living expenses and current debts and subtract that from your monthly income. Be sure to leave room for entertainment expenses and money to put into a savings account.
The number you reach afterwards should be positive. If not, and you are in the red, you need to come up with a plan to get yourself out of your current debt situation. If you are in the green, congratulations, this amount can be used towards paying down your student loan debt. Now you have a number to bring back to your student loan lenders.
Go Over Repayment Options with Lenders
Contact your student loan lenders to decide on your repayment plan. You already selected a plan when you completed your Master Promissory Note. However, you are at liberty to change your repayment plan. There are four basic loan repayment options, all of which can be switched to another plan at any time. Be sure to go over options with your lender if you are not able to make any payments.
For additional assistance to understand your repayment options as well as the application process, visit www.collegedebtsolution.com/Federal-Loan-Consolidation
Find Out if You Qualify for Incentives
Make sure to talk to your lender regarding incentives. Most will lower your interest rate if you select an automatic payment plan. Another incentive is the loan forgiveness program. Working in a public service job in a low-income community or volunteering at these jobs, can student loan debt. Visit the College Debt Solution to find out more about the Loan Forgiveness Program.
If you need to strategize on paying your loans off, target paying your private loans off first. Their interest rate may be higher thus increasing the amount you pay back substantially more, if you cannot afford to pay more on it. Also, you may not have access to other loan incentives like multiple payment options.
Reports suggest that 60% of the college students are drowning in college debt as they took out too many student loans to finance their bachelor’s degrees. The College Board reports released in the last month of October, 2013 shows that the students have borrowed an average of $27,000 on educational loan debt. The students who pursue a master’s or a professional degree usually tens and thousands of dollars on their tab. In fact, student loan debt crisis is the next big disaster that is going to paralyze an entire generation. If only the graduates could think of some ways through which they could avoid the burden of student loan debt, they could have graduated into a better and brighter future. Repaying student loan debt is a huge responsibility as there is no other option of discharging the debts through bankruptcy. Here are some tips that you can follow in order to eliminate student loan debt and maintain a safe distance with the same.
1. Look for scholarships if you’re still in school: Are you still in school while you find yourself saddled with student loan debt? Well, scholarships may be there in your mind when you’re applying for your school but always remember that you keep looking out for them throughout college so that you can match your extracurricular and academic accomplishments. You can have a talk with the financial aid office of your school to inquire about funds that are specifically beneficial for your school. Applying might take some time but this is free money and therefore you should give your best efforts.
2. Get organized with your finances: Being a student and staying out of state, doesn’t give you the right to take all the wrong decisions about your finances. In order to tackle your student loan debt, the first step that you need to take is to organize your finances so that you don’t miss payments and make late payments. Use a calendar or a tracking tool in order to keep a tab on each and every dollar that you spend. Set up a different account for bill payment.
3. Follow a frugal budget: You can follow a frugal budget in order to eliminate all the worries of missing payments and incurring late fees and penalties. Unless you devise a frugal budget, you won’t be able to maintain a track on your pennies. You need to keep a close watch on your money so that you don’t make the mistake of spending more than what you earn. Always spend less than what you make so that you have enough to save.
4. Try the loan forgiveness options: If you want to eliminate your student loan debt without repaying them and without seeking professional debt help, you may try forgiving the student loan debt through different public service programs.You can certainly help yourself by forgiving a portion of your student loan debt but in lieu of that, you have to agree to work in high need areas for a fixed number of years (see requirements). These areas include the rural communities and schools and medical clinics and even low income families.
Therefore, when it comes to repaying your student loan debt, you have to take some watchful steps about managing your finances and keeping debts at bay. Follow the steps mentioned above and get help of the professional financial advisors in order to stay on the right track.
The Health Care Reconciliation bill of 2010 pretty much stated that there was too much of the government backing loans made to students via private lenders, as well as lending the government’s money to students for additional loans. To put a halt to it all, the government switched all of their loans, which were serviced through the Department of Education, to new loan servicing companies. Apparently, it wasn’t to any lender in particular, offering no rhyme or reason. This change came with no warning and no advice to lenders.
Responsible student loan borrowers would soon learn of this through alarming methods. Some of these methods were logging into their National Student Loan Data System and discovering their loan was now at a zero dollar balance. The calls would soon flood the Department of Education phone lines with concerns of high interest, assumed missed payments, and defaulted loans. Once explained what has happened, the concerns shifted to why notifications were not sent, who were these new lenders and if they had good lending practices.
Some borrowers experienced issues having their automatic payments set up properly. Others had their monthly payment amounts and schedules shifted. Many would think a lower payment would be better and more affordable. Some people may have taken this as a great new start. Others looked at it as a scam. The lower the payment meant more outstanding balance to have the interest accumulate on. This also extends the life of the loan to be paid off, in some cases from five to seven years or possibly more. Not knowing their loans were switched over and payments not going through means they were falling behind on their payments and any student loan is reported on the credit report.