CHARLESTON, W.Va. — As students loans continue to climb and climb, many wonder if a college education is even worth it anymore.
U.S. Senator Joe Manchin introduced bipartisan legislation Thursday on Capitol Hill dealing with government subsidized loan interest rates which are set to double from 3.4 percent to 6.8 percent July 1.
The Bipartisan Student Loan Certainty Act would lower and fix interest rates for 100 percent of newly issued student-loans to the U.S. Treasury 10-year borrowing rate.
Brian Weingart, the senior director of financial aid for the West Virginia High Education Policy Commission, said a college education is affordable if you follow some simple advice.
In 2013, the average student graduated with $26,600 in loans according to the Institute for College Access and Success.
Weingart said many students can drastically reduce that number, if the first thing they do is file a Free Application for Federal Student Aid, or FAFSA. That helps maximize the amount of student financial aid that’s available. Weingart stressed it is the most important financial aid document students fill out.
Once that’s complete, students need to be willing to make a little money on their own to pay for their education.
“They might want to look for work study jobs or maybe even a part-time job to help,” according to Weingart. “It can help you cover the cost of college without having to borrow student loans.”
Weingart said the last resort should be to take out student loans. That is what can cost you in the long run. His best piece of advice.
“Only borrow what you need!”
Oftentimes students will take out more money than they need to pay for just tuition and fees. They’ll add in things like room and board that can balloon a loan.
Weingart said you need to think carefully about exactly how much money it will take to put you through college and how much you’ll be able to pay once you graduate.
“Some of the things you want to look at when you borrow student loans is the program that you are in and what the salary you’re going to make when you get out,” stressed Weingart.
If your earning potential per year after graduation is only $20,000, taking out $100,000-plus in students loans just doesn’t make financial sense. But if you budget wisely and consider your future salary, Weingart said you can make it work by borrowing smart.
First, pay as much as you can as you go through school. Most colleges and universities have multi-payment plans so you don’t have to come up with the money all at once.
Remember you’re going to have to start paying back your loans six months after you drop below six credit hours. Depending on how many credits you take your last semester, that could come sooner rather than later.
And many federal student loans now have limits.
“They’ve instituted some new repayment plans called “income-based replacement” or “pay as you go” to where it’s based off of the amount you earn, not the amount that you borrowed,” explained Weingart.
He urges families to log on to www.studentloans.govto help figure out your loan payments, how much you’ll be able to afford on your salary and how long it will take to pay off the loan.