Managing Student Loan Debt

One of the best ways to keep debt from student loans under control is to not incur them in the first place.   Sounds simple.  In many ways it is, but you have to know what is actually going on in college pricing.    Buzz TodaySource:  Wall Street Journal  Almost 88% of first-time, full time freshmen at private nonprofit colleges and universities received some type of grant in 2011, according to the National Association of College and University Business Officers. .

To understand how to reduce the amount of debt you incur, you have to know how the college pricing actually works.   Every college and university lists tuition costs, typically per semester credit hour, someplace in their materials.  If you search the web site hard enough you should be able to find the cost of tuition.  If you cannot find it online, you will need to ask when you talk to the university on the phone or in person.

It is important to ask the price of tuition per credit hour.  The reason this is important is because individual courses and programs are different numbers of credit hours in length.  It is also important to ask about credit hours instead of cost per course when comparing costs between two different colleges.  Semester credit hour is the standard unit of measure in higher education.

Beware of the difference between quarter credit hours and semester credit hours.  If you are quoted quarter hours you will need to convert the price to semester credit hours by dividing the price by .67 to get the equivalent semester hour cost.

Now here is where the reduction in debt comes in.  The college or university will not offer a grant.  You have to ask.  When you ask, the place to start is with the question:

“What was the average value of the grants your institution awarded to incoming students last year?”   They have the number but you have to ask.

For more information about grants, scholarships and other forms of financial aid go to where chapters in “Your Future is Calling” make information from each college and university available to you.

In the end, the goal has to be for you to reduce your college debt.  The best place to do that is at the beginning of the process, not at the end.

Student Loans


Borrowing to finance your education is one of the easiest ways around to get money. The Federal government both issues the debt and guarantees it (to itself). Your credit score does not come into consideration when qualifying for this money.

Private lending is not like that. It is not the only thing that is different between borrowing to finance a car purchase and a government loan to pay for tuition.

Buzz Today Source: Education Week. Students are taking on more college debt in this struggling economy, often without the knowledge to make wise choices.

If you have not borrowed money from the government to pay for your education there are two important things you need to know.  Even if you have borrowed for college before these are things I want to remind you of.

The good news about borrowing money to pay for your college education is that how much you are eligible to borrow depends on your class standing (freshman, sophomore, junior or senior) not how much money you need for tuition. The bad news is that how much you are eligible to borrow depends on your class standing (freshman, sophomore, junior or senior) not how much money you need for tuition.

About this time you are saying to yourself: “OK wise guy, what’s up with this?” The answer is that it is extremely tempting to take out college loans to pay for tuition and to use the easily accessible cash for other financial needs in your life. People take out student loans to buy flat screen televisions.

All I can say is, “don’t do it!” The reason I say this is the really bad part about debt assumed under Stafford loans. Unlike almost every other form of debt in America today, you cannot discharge (wipe out your obligation to repay) under bankruptcy. For all intensive purposes, it stays with you forever, or until you pay off all of the principle as well as the interest. That is really bad news, especially if you do not have a job.

The point is, make sure if you are going to take on government debt, make sure you have completely examined the prospects for employment in the career field your degree is designed to serve. Otherwise, you will have perpetual debt that is actually growing rather than shrinking.

There is more information to help you manage your student loans at: