Byline: Sarah Skidmore, Times-Union business writer
You wanted to be a doctor or a lawyer or a teacher when you grew up. Well, now that you've received the education, it's time to pay the bill. What's the best way to do it?
Just as in cholesterol, in debt there are good types and bad types. Most financial planners say student loans are good debt. Those loans got you the degree that increases your earning potential. But that doesn't ease the sting when the bill shows up every month.
Upon graduation, the average undergraduate student owes $11,000 and an average graduate student owes more than $20,000, according to Mark Kantrowitz, author of several financial aid and college planning books and creator of financial aid information Web site finaid.com.
Because of the size of the debt, student loans can deter you from attaining financial goals such as home ownership or other aspirations such as furthering your education.
But even if you're bearing the burden of college debt well into your working years, you can still reach your goals. Taking advantage of recently reduced interest rates to consolidate loans, asking for deferrals of payment or discounts and taking a deduction on your taxes can all help balance the load.
Brittany Ellis, a law student at Florida Coastal School of Law, says she's starting to feel the pressure. She faces about $100,000 in student loans -- about average for law students -- when she graduates in May 2002.
"They say I am living better than I will after I graduate, which scares me because I am living on federal loans," she said. "Luckily the government works with you for your payments and makes it easier. But there's really nothing left over after that.
"It definitely puts everything else on the back burner."
Shawn Lindstrom, director of financial aid and scholarship services for Student Advantage and former assistant director of financial aid at Ithaca College, calls it the unfortunate reality of getting an education. In most cases, you've got to get loans, and in all cases, you've got to pay it back.
Simply not paying back student loans became popular in the 1980s, said Kantrowitz. Some students would just ignore them and declare bankruptcy to get out of debt. But laws created in 1998 to combat that trend made it nearly impossible to use this once popular option. Without proof of significant hardship, you are still responsible for student loan payment even after declaring bankruptcy.
Since you've got to pay it, pay it wisely, financial experts say.
ASSESS THE DAMAGE
Student loans can come from a variety of sources. So your first step in the battle is knowing your enemy.
Sit down with all that paperwork you've accumulated and find out who you owe and how much.
So if you haven't kept track -- start doing so. This information gives you the documentation you need to argue any errors, reach people for help, find out interest rates and other useful things.
Try contacting the financial aid office at your college or university if you have no records at all. Odds are if you owe someone money, they've been trying to find you and there is a record of it somewhere.
It may be confusing to determine whom you owe. Lenders will sell your loans to other providers but alert you of the change -- the latest records will show your current lender. In most cases, students borrow directly through federal government sources, not private lenders. But some students have loans from several sources to track.
When figuring the total debt, only add up the stuff that counts. Don't include balances you've already paid off or money you don't owe, such as grants or loans someone else took out for you.
In most cases, payments will begin six months after graduation, and payments may take as long as 30 years to complete.
Sotha Svay, 25, who is working full time as an administrative assistant, is putting off plans to buy a home until she finishes paying off her school loans. …