Making Educated Decisions about College Can Be Easier on Your Wallet

Whether you are about to graduate from college with a mountain of debt, or filling out your first financial aid forms and already panicking about going into debt, it’s important to have all the information about student loan debt in front of you as you make decisions and start signing on the dotted line.

One year ago, student loan debt was exorbitantly high and many graduates were still having little luck landing jobs. The economy hit the recent grad sector especially hard. The untold number of college graduates remain unemployed or severely underemployed. Regardless, student loan debt lingers.

If you don’t want to be a statistic, know the facts. Make good choices about how to pay for school.

1. Choose a budget-friendly school; think “value” not just name. According to the Consumer Financial Protection Bureau, as of July 2014, borrowers in the US were facing $1.2 trillion in outstanding federal student debt. Trillion, with a T. If you choose a school that has a more reasonable price tag while offering you the ability to get the education you desire, you won’t add to that statistic. Further, you’ll be doing your future graduate self a big favor.

2. Do you need a graduate degree? Of course, there are some career options that require advanced degrees. You likely won’t be operating on anyone soon without significant schooling. However, there are many careers that don’t necessarily require a graduate degree. You can “just say no” to debt by passing on masters and going to work. The New America Foundation says that 40 percent of federal school loans go to graduate students. (Or, you can consider an advanced certification program or community college course to keep costs down.)

3. How much is too much? The National Association of Colleges and Employers reported that the average starting salary for 2013 college graduates was about $45,000/year. (Assuming you can get a job in your field, that is.) Experts suggest figuring out what your potential starting salary could be in four years and not borrow more than one year’s worth of salary. Also, do the math. There are debt calculators available at the click of a mouse to determine what the estimated monthly bill for your college loan repayment will be when you graduate. Can you starting salary manage that debt? If not, that debt may be looming large for a long time.

4. Are you on the four-year plan for graduation? An annual U.S. News survey reveals that many full-time, first-time students do not get their diploma in four years. If you have to go to school for longer, you will have to assume even more debt. Therefore, experts suggest considering schools with high graduation rates to increases your chances of getting to the finish line in a timely manner.

Finally, always ask about merit scholarships and other financial aid options. Different schools offer programs you may have no idea about until you ask.