In today’s 4 Your Money segment we talk about managing student loan debt. Students are marching in Washington, DC. They are asking congress to prevent a spike in their student loan interest rates.
They didn’t get their wish. Yesterday the interest rate on a key federal student loan doubled because congress left for its July 4th recess without voting on it.
To explain what this means and provide some great advice for avoiding as much debt as possible is state treasurer Ken Miller.
In the video he explains what the subsidized Stafford loan is. The interest doubled, but congress still has a chance to undo this.
A good rule of thumb is to make sure your student loan payments won’t exceed 8% of your first-year monthly income after graduation.
To manage student loans wisely, always go for the free money first. There are multiple programs that grant free tuition and other expenses for those who qualify.
Another good piece of advice is to shop around for a student loan lender and borrow only what you need. It might be tempting to borrow too much. Borrow for school, not your lifestyle.