Millions of young people go to college in order to accomplish their dreams; unfortunately, many of them will have to take on overwhelming amounts of student loan debt in the process. And with recent reports about the rising interest rates of student loans, it would appear that the burden for current and future college students is getting heavier.
There has been a Congress crisis over student loans this past week. Congress sets the interest rates on federal student loans and the interest rates on Federal Stafford loans were scheduled to double from 3.4 percent to 6.8 percent this year. The Senate was supposed to come to a decision by July 1st, but they failed to do so. There have been talks of revisiting the issue this week, but so far it has left current and future college students in financial limbo.
Student debt is a very big issue in America. Nearly 60 percent of college students borrow money for school. Today, there is roughly between $902 billion and $ 1 trillion in total outstanding student loan debt in the U.S. The average amount of money that a student borrows varies from $8,000 (four-year public institutions) to $31,000 (for-profit institutions). And, unfortunately, this recent interest hike only adds to students’ worries. According to the Congress’ Joint Economic Committee, this could cost some students an additional $2,600.
So, whether you’re a current college student or about to begin your first year this fall, you’ll need some Mindful finance tips for school.
Consider these Mindful Money suggestions of you are suffering from student loan debt:
Looking for scholarships may seem like a no-brainer, but few students find the time to exhaust all of their options. Treat your scholarship searches as you would a part-time job. Dedicate hours to your search every day or frequently throughout the week. Stay organized so you won’t miss deadlines and always be sure to read the fine print and stipulations.
College costs can add up quickly, so be sure to look ahead when you start planning for college; don’t just focus on the first year. Consider using college calculators that can help you determine how far your savings will go, how much debt you’ll most likely take on, and how soon you’ll be able to pay your loans off.
You can reduce the cost of your higher education by taking summer classes for your degree at a community college. It’s a cheaper option in most cases and you’ll be able to graduate with less debt. Remember to talk with an adviser first to be sure that the community college credits will transfer adequately.
There are some career and volunteer opportunities that offer loan forgiveness. So, in return for your work or service you could have a portion of your loans repaid. Become a teacher for five years and up to $17,500 of your Stafford loans could be repaid. Join the Peace Corps and you could reduce your Perkins student loan debt.