Student Loan Education Should Happen in 10th Grade
Learning about student loans just as you’re trying to figure out how to finance your college education is the absolute wrong time. I only remember hearing two things about student loans when I was in high school.
A friend of mine said his aunt, in her 40’s, was still paying on her student loans. My mom said she’d paid back her loans within a few years after graduating. That’s not a lot of information for an 18-year-old about finance a $40,000 education.
Some kids’ parents have their college education funding figured out for them. I wasn’t one of those kids. I ended up making my own decisions about how college would be paid for and though they weren’t horrible decisions, I’d made different ones if I could go back.
Students should be taught more about borrowing for college before college, 10th or 11th grade is ideal. Especially since the Federal Application for Federal Student Aid has to be filled out in March of the student’s senior year in high school.
Three things students need to know:
- Student loans have to be repaid. It sounds like a no-brainer but the young teenaged mind doesn’t fully comprehend it means to spend 10%+ of your income on a 25-year debt. Teenagers should be taught the difficulties of juggling student loan payments with other real life expenses.
- Borrow only what you need. I saw a lot of people take out extra loans so they could pay for their apartment, car, clothes, etc. When you’re sending $350 a month to Sallie Mae to pay for a car you stopped driving three years ago everything gets put into perspective, you start to regret that decision.
- Stick with federal lenders. Federal student loans are backed by the government and often have more benefits, like lower interest rates and default rehab. Private student loans, offered by banks, have higher interest rates. Not only that, it’s hard to consolidate multiple private loans, even if they’re from the same lender.
Are there some things you wish you’d known about student loans?