Paying for College

By Suzanne Costanza
Executive Director, Florida Council on Economic Education

By now, as a high school junior, you’re hearing about all the possibilities that lie ahead of you. Colleges and careers are beckoning – but you’re also hearing about the burden of student loans. But student loan debt doesn’t have to overtake your adult life if you adequately prepare for your future.

By your junior year of high school you’ll want to narrow down your post-secondary options… will you go to a community college, will you go to a four-year university, will you join the military, or will you learn a trade? If your choice is to continue your education, it’s important to assess all the estimated financial obligations you’re likely to incur and compare your options side by side. To begin, Google for “College Price Comparison Worksheet” and find a template you like, then begin to research potential schools and fill it in.

Once you’ve gathered all the information, it’s time to sit down and discuss how to go about paying for it. Does a family member have some money set aside in a 529 or college prepaid plan? Do you plan to work full time or part time? (Hint: Explore work-study programs your school may offer as well.) What scholarships are available through your chosen school or independent grantors? Above all, it’s essential that you fill out your application for financial aid (also called the FAFSA)! Only after all these options are exhausted should you begin to consider taking on student loans.

Currently, student loans account for over $75 billion of all Floridians’ debt, according to a study by realtor.com. That represents 2.2 million borrowers who owe an average of $34,544 each.

Student loans must be paid back with interest, so it’s important to understand the terms of the loan BEFORE you sign the closing documents. These terms cannot be discharged by bankruptcy and they will follow you anywhere you go. Of all debt, this is the most likely to cause issues later in life – so use it with caution!

Creating a debt repayment strategy and sticking to it is a safe way to manage your finances. Although you may not be required to repay your student loans while still in school, with many students loans interest will accrue from the moment the money is dispersed, so it’s a good idea to get ahead of it as early as possible.

Additionally, it’s important for anyone with a student loan to narrow their focus and work hard in school. Changing your major, for example, means taking additional courses, and that may increase the amount of money you spend on housing and books. Failing to research a degree and the salary it can help you earn out of college may hold you back financially for many years as you struggle to pay off your student loan bills.

Currently, there is a course available to help all high school students learn how to manage their finances, from classroom to career –  Personal Financial Literacy #2102372. Students simply need to sign up for it. This course covers preparing for a higher education, but it also does something more. It teaches young people how to make wise decisions that can have a significant impact on all areas of their adult lives. Truly, at its core, it is a class on decision-making.

Students with a financial literacy skill set in their back pockets are savvier with money, less likely to default on a loan, and feel more capable of managing a financial hardship. For more information on the course or helping teens manage their personal finances please reach out to the Florida Council on Economic Education.

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