| Student loan calculators an invaluable tool |
| Written by Henry Johnson | |
|
As a college degree becomes increasingly necessary to land an hold a worthwhile job in today’s global economy, an increasing number of students are attending university, and taking on debt to do it. According to the United States Department of Education, two out of three college graduates will leave school owing money on student loans . The average debt of these students is $21,000. Although students will have better opportunities thanks to their advanced education, jobs are hard to come by in the current economic environment, and starting one’s adult life deep in debt can be a hindrance to building credit, founding businesses or starting a family. Students can reduce the amount of their debt burden by borrowing wisely, and keeping in mind that they will have to eventually repay the money that they borrow. When considering taking out a loan for their education, students should consider the amount of money they will need for school, whether they could augment their money with a part-time job, the salary level for the field they are choosing to enter, and how much their monthly payment will be. Students will also want to consider whether they intend to take out government backed loans or go through a private lender. A student loan calculator is a useful tool in making determinations about loan affordability, monthly payments and related concerns. There a quite a few of these calculators online which has a pretty straightforward method of calculating your payments and the interest that you’ll pay. The U.S. Department of Education also has some good online calculators on its site too. The Department of Education’s calculator allows students to see what their monthly payment and total repayment amount will be under each of the program’s repayment plans. The U.S. Department of Education offers three basic repayment plans: 1. Under the standard plan students pay a fixed amount every month until the loan is paid off. The monthly payments will be at least $50 and the loan repayment period generally runs 10 years. The standard plan is good for students who can handle higher monthly payments because it allows them to retire the loan quickly. 2. The extended repayment plan offers a lower monthly payment, but the loan repayment period is stretched out over 25 years, thus costing the borrower more interest in the long haul. 3. The graduated repayment plan starts with a small monthly payment that grows over time. This plan is good for students who won’t likely be paid much at the entry level but can expect increased compensation over time. Under the income contingent plan, the amount of the monthly payment is linked to the borrower’s income and family size. The term of the loan is 25 years, and if the loan isn’t paid off in 25 years, the remaining amount owed is discharged. With regard to private lenders, most of them also have loan calculators that allow students to find out information about loan amounts, interest and repayment. The calculators also take into consideration any collateral students may put up as surety, and what impact that will have on the loan. A student loan calculator can help students examine each of these plans and allow students to make the choices best suited to their circumstances. This invaluable tool can greatly help students responsibly plot out their future, and get a true idea of the real cost of their college education. |
| < Prev | Next > |
|---|
