LINCOLN — Six of every 10 students who collected bachelor’s degrees from the University of Nebraska-Lincoln last spring borrowed money to pursue their education, graduating with an average debt of $17,551.
That amount would result in a loan payment of $201.98 per month for the first 10 years of their working lives, according to FinAid.org, a Web site created by Mark Kantrowitz, a Pennsylvania consultant and national expert on college financing.
Assuming they can afford to pay no more than 10 percent of their gross income toward the debt, they will need to find jobs that pay at least $24,237 a year.
Nebraska financial advisers say there are no hard and fast rules on how much student debt is “too much,” but they suggest that students and their parents proceed with caution when signing up for student loans.
Kerry Anderson, a financial representative in Lincoln and father of a 17-year-old preparing for college, said families should look for grants, scholarships and other “free” money before applying for loans.
Anderson said they shouldn’t forget to check whether their employers, service organizations and religious denominations offer tuition assistance or scholarships.
Through the University of Nebraska’s College Bound program, students whose families earn up to $50,000 a year may be able to attend college tuition-free.
The program supplements Pell Grants with institutional aid so that more students are eligible for tuition grants.
Anderson said families also should find out how much grant and scholarship aid they can get before tapping too deeply into their college savings accounts.
Families should turn to private loans only as a last resort because of higher interest charges. And, Anderson emphasized, students should resist the temptation to use credit cards to finance their college education.
The federal government defers interest payments on subsidized Stafford loans, which are available to students based on low family income. Unsubsidized loans, on which interest begins accruing while the student is in college, are available to students regardless of income.
Current interest rates on both loans are 6.8 percent, with a typical repayment term of 10 years.
Anderson recommended the following Web sites to learn more about paying for college: CollegeboundNebraska.com, Educationquest.org and knowhow2goNebraska.org.
Contact the writer:
402-473-9581, leslie.reed@owh.com
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