Loans Expert

According to a study by the Project on Student Debt, recent graduates left college with an average of $19,646 in student loan obligations.

“Unfortunately, some graduates have additional credit card debt or car loans,” says Ken Shapiro, certified public accountant (CPA) and a certified financial planner..

As a first step toward mature, financial independence, Shapiro recommends that new graduates develop a financial plan. “Work out a budget,” he says. “Determine what your real needs are. Figure out how much you can afford to pay down. Pay on time so you can build good credit.”

For younger students and parents of children who still have college ahead of them, Shapiro has some additional advice.

“This is something I am recommending to some of my clients,” he says. “For the first two years, attend the local community college,” Shapiro says. “It’s where you graduate from that matters, not where you start.”

New Jersey offers free community college tuitions for top high school students – the NJ STARS program. The state has also passed a law that all community college students get full credit for their work when they transfer to four-year state schools.

The New Jersey Society of Certified Public Accountants (NJSCPA) offers other suggestions on how to manage college debt:

Students often sign up for a number of different loans to finance their education. That may mean writing several checks to different lenders at various points in the month, Shapiro said.

Shapiro points out that it make life easier to just write one check, but it may not necessarily lower overall the monthly outlay and a consolidation loan over a longer period means the loan will cost more in the end.

Do you wish you could make a difference in the world? It’s possible to cancel some or all of your federal student loan balance by signing up for any one of a number of programs aimed at making positive change.

For example, teaching in an elementary or secondary school in a low-income area can reduce some federal loan totals, while serving a two-year term in the Peace Corps can also lead to a reduction in the loan balance, said Shapiro.

Volunteers for AmeriCorps and VISTA may qualify to postpone loan payments while they are involved in the program and receive stipends that can be used to pay down student loan debt.

Health professionals who spend two years working with the National Health Services Corps serving communities that have a shortage of medical help can qualify for loan forgiveness of up to $25,000 a year.

In addition, many law schools have loan forgiveness programs for newly minted attorneys who take jobs in public interest law.

That commitment can also help relieve some student loan obligations.

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• White House Highlights Higher Education And Student Loan Reform
• State should support student loan reform
• Student loans bill clears House
• The Rising Costs of Student Loans

Tags: Student Loans