College Debt FAQ
College debt can be overwhelming. In addition to receiving scholarships, Alray Scholars get advice on how to get their financial house in order. Here are highlights from an Alray Q&A seminar on managing debt led by board member Kevin Fudge, manager at American Student Assistance.
- How should a college student balance savings, debt, bills and spending all at the same time?
Maslow’s hierarchy of needs – understand needs vs. wants. Make tough decisions now – short-term pain, long-term gain: living at home, cutting back on entertainment, etc.
- When is it the right time to start paying off Federal Student Loans? While attending school? When it’s affordable? After fully completing your higher educational program?
Great question! Subsidized vs. unsubsidized – advantage of paying interest while in school. Affordability is the key – did you have the discussion (with yourself or with others?) about how you define affordability? (He also mention the grace period – how it is finite).
- In terms of financial stability, what should I be doing right now to prepare myself financial for the future?
Budget – know what’s coming in, what’s going out – and what percentage of your monthly income is going towards housing.
- How would he go about managing loan debt if the 6 month grace period is already used upon graduation?
Review income-based, pay as you earn and income contingent (best to do in combination with Public Service Loan Forgiveness)
- Any suggestions about financing graduate school and possibly a Ph.D program?
For graduate school, get your employer to pay part or all of the costs. A Ph.D. program can be fully funded, depending on the program. Let the buyer beware, because many Ph.D. recipients struggle to find work. Click here for an example.
- Suggestions on how to create a budget to help pay student loan debts, daily living expenses, and future educational expenses
Set goals – savings goals, career goals, life goals, etc. Examine wants vs. needs when determining how they all fit together, and understand various funding sources for continuing education.
- How can you restructure your Federal Loans after graduation?
Loan consolidation into the Direct Loan program to qualify for PSLF, and consolidation in general turns all loans into one loan.
- Is it possible for you to have your Federal/State loans forgiven or reduced?
ABSOLUTELY!!! Click here to learn more.
- Can I meet with an ASA rep individually? If so, how?
Indeed – the College Planning Center at the main branch of the Boston Public Library. For more information, click here.