June 21 – More than one in 10 Americans hold student loan debt – that’s 43 million people! And it’s no small amount of debt either. Total it together and the bill comes to just over $1.6 trillion. That’s an awfully big hole to dig out of.
Programs offered through the State Treasury give Mississippians a way to reduce or eliminate their student loans, but for many, loans will still make up at least a portion of the funds required. If that’s the case for you or a member of your family, there are ways to reduce your reliance on those loans while in school.
One of the first things to remember is that just because you’re approved for a loan doesn’t mean you need to max it out. College-bound students should understand the seriousness of debt, how easy it is to acquire, and how difficult it can be to pay back. Before signing on the dotted line, discuss a plan to pay it off and get an understanding of how long it will realistically take to get out of debt.
Second, take steps to ensure your debt doesn’t spiral out of control. While you can’t directly use student loans for dining out or going on vacation, many students use the funds to subsidize other activities, taking out loans to cover a larger portion of college than one needs in order to keep more cash on hand for non-qualifying activities. It’s important to remember, however, that student loans are borrowed money that young people must pay interest on. Every dollar taken out costs you more when the bill comes due. To keep young people on track, help them set a budget to live within their means.
When it comes time to pay back the student loans, experts agree borrowers should try to pay more than their monthly payment, if possible. This will help reduce the overall interest due, saving you money and getting you out of debt faster.
As I mentioned before, my team at the State Treasury is here to assist families in setting up a Mississippi Affordable College Savings (MACS) account or Mississippi Prepaid Affordable College Tuition (MPACT) plan to help families reduce or eliminate the need for student loans. What’s more, we’ve made changes in recent years to ensure these plans help those interested in community college, apprenticeships, and certification programs – all of which can offer a more affordable way to further one’s education.
This article is written and provided by State Treasurer David McRae. Any opinions expressed are that of the writer and not necessarily that of this publication.
