Taking out a student loan these days is not much different than creating a social network profile; virtually anyone can do it and any subsequent repercussions from the action could take months or even years to surface. The only problem is some students don’t realize just how much of an impact taking out a student loan can present on their financial lives down the line, especially if they don’t earn enough to pay it off after graduating.
Some students take out the maximum amount available only to make a fraction of that loan amount per year in income. This is why it’s good to have an idea of your earning potential before ever applying for a student loan. This way, you won’t end up with student loans you can’t afford to pay off later.
The Weight of Taking on Student Loans
When you first begin your college journey and are looking for a way to finance your education, taking out a student loan sounds like a good idea, especially if you don’t have or are not eligible for grants or scholarships. The student loan route sounds even more enticing once you realize that you get to keep whatever is left over after paying for tuition, books and room and board.
It almost feels like free money. The only problem is that a student loan isn’t free at all. Whether you take out a private student loan or federal student loan, you will have to pay interest on top of your principal loan amount for up to 30 years to resolve the debt.
Will you be prepared to do this? It’s hard to know for sure even if you have a good idea of what type of career you’d like to pursue, but it’s good to have an idea by taking the appropriate career planning steps.
Determining Earning Potential and Calculating Student Loan Interest
While it’s not always easy to find out the earning potential of jobs based on when you plan to graduate, you could still get a basic idea of what type of salary a specific degree is likely to earn.
To help make the determination a little easier, let’s look at a few degrees and their earning potential (according to PayScale.com’s 2010-2011 College Salary Report) compared to a few student loan amounts and their repayment expectations (according to FinAid.org) over a 10-year period to determine what might work best for you.
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Degree |
Avg. Starting Salary per Month |
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Why Your Student Loan Amount Should Match Your Earning ……
[...]It’s common knowledge that obtaining a degree will increase your earning potential, but be sure that potential is great enough to cover your student loans.[...]…
Why Your Student Loan Amount Should Match Your Earning Potential ……
[...]Taking out a student loan these days is not much different than creating a social network profile; virtually anyone can do it and any subsequent repercussions from …[...]…