What to Consider Before Obtaining a Student Loan

college loan costCollege tuition rates are on the rise with a private four-year college costing an average of $35,000/year, while public schools average $9,000/year.

While these numbers may send some of you running for the hills, they do not take into account living expenses, books and other fees.

After recently graduating from college, I see many of my classmate’s way over their head in student loan debt. I graduated from a public college and see debt from ranging from $10,000 to $100,000.

Before obtaining a student loan, you should consider these factors.

Parent contribution: How much are they really covering?

Every parent wishes they had the disposable income or investments to pay for their child’s college expenses in full.

However, with many of us struggling to pay our mortgage and daily expenses, paying for expensive college tuition is far out of reach for the average American.

Before considering a student loan, for a public of private college, it is important to assess how much money your parents are contributing. Make sure you know the exact contribution, whether that is $5,000 or $200,000.

If the contribution is on the lower end, you may consider community college for two-years, or public school to offset the rising cost of tuition.

Can you afford your major: What major do you want?

Picking a college major is the most important part of college, aside from maturing and meeting lots of friends and contacts.

For instance, if your major is English you can expect an average starting salary of $31,976, while electrical engineering majors can expect a starting salary of $48,883.

Your major will greatly affect your earning power and your ability to pay back student loans.

Students interested in majors with lower starting salaries should consider limiting the amount of student loan debt they receive, while students who need a technical degree for a high paying major can take on more student loan debt because they will have the ability to pay the loan back.

Another important factor to remember is that with the economy doing poorly, it is difficult to find a high paying full time job.

How much money do you need aside from tuition?

student loansFrom my experience, I found tuition to cost the least amount when compared to other college expenses.

My state tuition cost on average, $11,000/year, but the housing, food and books cost an additional $12,000/year. Don’t only rely on the cost of tuition when budgeting for college.

You need to consider how much more you will spend throughout the year and decide if you need to take out more money to cover these costs. You have to consider the interest rate when borrowing money.

Every expense you pay with student loans carry interest, which raises the cost of those loans even more.

What interest rate can you receive?

If you don’t qualify for federal loans, or don’t receive much in aide, you will have to rely on private loans. My highest private loan interest rate is a whopping 8%.

However, I only have $4,000 with this interest rate. Credit unions typically give very low interest rates; I received around 4.5%, for union members.

If you have good credit, it is important to minimize your risk by shopping around until you find the lowest student interest rates on your student loans.

High interest bad credit loans can double your total borrowed amount by the end of a typical 10-year term loan. Therefore, it is important to consider how you will pay for the loan once you graduate.

Being Creative and Budgeting: How Associated Content Has Helped Me Meet My Goals

Here’s my old story to share with you:

I stumbled upon Associated Content quite by accident one evening. As a private tutor, I was working late checking over a student’s essay and found a reference link to Associated Content. Most Universities are source snobs; meaning 90% of internet sources are seen as unreliable.

I looked over the website trying to decide if the reference could stay or if it would have to be cut out of the work. I decided the source was perfectly acceptable as the author had used references from scholarly journals, but as I moved on I was still intrigued by the site. I bookmarked it for later use.

A few days later I had a lull during my working hours and decided to check out the website once again. I saw the signup page and figured I might as well give it a shot. As a journalism student, I had been in the trenches of a newspaper and was looking for something that would allow me to really explore the web side of journalism and also allow me to write on topics that I was interested in.

My intentions were never to pay the bills with Associated Content money, I had that all but covered with tutoring and other freelance work I was doing, but AC allowed for something even better; spending money.

Get more ideas on how to start from this video:

As Paypal began to expand its list of partners and accepted sites I began to find a new use for my Associated Content money. With the ability to order merchandise online I found an Associated Content perk that I never would have expected; a budgeting tool.

I had been a casual Paypal user for some time so once I saw money rolling in from Associated Content via my work and calls for content I quickly put it to use ordering merchandise I wanted. Shortly thereafter I accepted the PayPal debit card and have not looked back since.

It works quite well for me. I use my Associated Content pay to buy the luxuries I previously couldn’t afford and am able to pay my bills and put money in savings from my other job. In the months that I’ve been working with Associated Content, I’ve found everything seems to flow together seamlessly in regards to my finances.

I’m no longer dipping into money I shouldn’t be touching to buy the leather jacket I just had to have or the shoes that were so sexy but pinched my toes. When AC money accumulates enough then those items are mine.

Besides the money issue, Associated Content has given me the chance to really expand my writing expertise. While working on papers I found I was forced to write on topics I had little or no interest in. While that is simply part of the job as a creative person I found it to be a bit stifling.

The feature like the feel of Associated Content allowed me to truly delve into topics of interest or topics that I was particularly passionate about. Not only am I making extra money but I am also quenching my thirst for stories that truly capture my interest.

We went through consumer credit counseling


I’m new to the blog. I’ve been married for 17 years, and we have 4 children 3,6,13,and 16. We still struggle with debt.

We went through consumer credit counseling before we were married. We were in debt over our heads and it took the pressure off of us as CCCS handled all of the payments for us and negotiated with each of the creditors.

Our only responsibility at the time was to get them a money order or a cashiers check once a month by a specific date and they took care of the rest. It took us several years to get everything paid off but it was well worth it.

As we began to have children we slipped into old habits, especially as they neared the teen years so we have more debt than we feel comfortable with and are working to take care of it.

One thing that has really helped me is our Credit Union. Ours is one of a very few that offer a bill payment service through their savings account (or share account for those of you that know the terminology). It has been such a relief for me to give up a checking account. I never worry that one of us forgot to write a check or withdrawal into a register, or worse one of those sneaky automatic payments!

I set up my payments to pull on whatever day I need them to, and they are withdrawn that business day. It has been wonderful!

Just a note for those of you considering a credit counseling service, be cautious. Not all of them are the same. The non-profit ones usually charge a monthly fee on a sliding scale of around $30 or less. When I worked in a bank I had several people mention they were considering a counseling service, when I question the cost I was told several times that the cost was $1000-$2000 upfront for their service. I immediatly pulled out the phone book and looked for the real non-profit one to refer them to!

Does anyone else watch Susie Orman?

Does anyone else watch Susie Orman? She’s always talking about your credit score and your FICO score. We’ve recently paid off two really high cc debts. So I’d like to get the lowest interest rate on the final credit card. BUT the other two were such high limits that I can’t get any new cards because my debt ratio is too high even though we don’t really owe that much. So I’d like advice on if changing the balance on the cards that are paid off to lower for example 12000 to 1000 would improve that FICO score. Does anyone know?

Your FICO score doesn’t dock you for high limit levels. 30% of your score is based on your debt to limit ratio. So if you’ve paid off two cards and have high limits, that should help your FICO. The other factors are 15% history (length of time you’ve had cards open – that’s why it’s best not to close your cards), 35% paying on time, and 10% new applications for credit. Basically, any new application for credit drops your score about 5 points – and that lasts for approx 6 months.

Scores are only calculated every 30 days, so I’d wait if you just paid those cards off. Then pull your own score, which sadly will differ from the one the bank pulls. A consumer score always shows higher than the score loan companies pull.

Is that what you were asking? 🙂

You can call the credit cards with the high limits of available credit and ask them to lower them.

If you had $1000 available and you asked that the limit be lowered to $500 and you had a $500 balance, you would be using 100% of your available credit (maxed out), vs. 50% of your available credit.

That could help, since you will not be showing a huge amount of credit available to possibly go out and run up more debts. I hear that is a concern of credit cards. That and they don’t want to lower your interest rates at all, so they make more money.

Yes that’s what I was asking. I have a discover card from college (long time ago) that I keep open for that reason. I don’t use it though. I have a Chase that we recently paid off. I have another card that I only use for small online purchases that I pay off each month. Then we have our disney card that we have a balance on. I am trying to get a low interest rate from someone but they say our debt ratio is too high. I know it isn’t anymore though. But thanks for the 30 day advice that’s probably what happened.

It probably hadn’t posted yet. I guess I’ll check our scores and try again to get no interest. Or something lower than the ten we’re paying now.

Chase paid, billed more interest

I’m so not happy…I paid off my Chase card last month in FULL & Early and they just sent me another bill for interest!! That is crap. I called them to pitch a complaint and she wouldn’t budge in letting it go. I even paid it early..It was due on the 16th and I paid them on the 8th.. I told them that the last guy I talked to said if I paid it off in full that I wouldn’t have to pay anything else. I told her that, and she still didn’t budge. Plus, I told her that Discover card, which I paid off last month, gave me a break but she still wouldn’t budge. I HATE CREDIT CARDS!!! I can’t wait till my last $4,000.00 is done…I’m gonna call and complain to the Better Business Bureau..

How much is Chase screaming about? Before you send them a dime, have them send you, in writing, a pay-off balance if paid by x date.

I had a similar situation with Sears where they could not give me a pay-off, I told them that since I was at the store and paying the card off, that I was paying the current balance and they could sue me for any balance. That was 2 years ago and I have never heard from them since.

How much was the interest? And there was interest accrued from that statement until you paid it off, even if before due date. Better yet file a complaint with the FTC. Go up the food chain, never take the first person’s word, keep going up the ladder.

It sounds like the first guy didn’t know what he was talking about! They bill interest daily, so because you carried a balance for some portion of the month, you were bound to be billed something. Annoying as heck though and it sure doesn’t seem right.

I’m having an irritating CC experience in the same vein. I have a card that the number somehow got stolen. I logged in online to see these charges I didn’t make, all listed as “pending.” The cc company’s response was to say, “oh, our fraud dept can’t do anything about those until they post. You’ll have to wait until they post and then call back.” WHAT?!?!? I was sooo mad!

So I paid off and closed that card. Turkeys. Now I’m waiting for my little interest bill to come in. I’m down to amounts due on two cards (and a loan to my credit union). I can’t wait til I get down to ZERO.

Sorry to hear about being laid-off

Sorry to hear about being laid-off, I can relate as the same thing happened to me about 2 years ago and I am still working to dig myself out of the hole. Looking back on it, I wish I had been more realistic and honest with myself about what a hole I was in with the CC companies.

As far as debt consolidation, I would reach out to moneymanagement.org as they were very upfront & honest about what steps should be taken. However, I did not end up doing business with them, so I cannot tell you how they are once you sign up.

Depending on the level of your CC debt, you may want to look at bankruptcy, which is an option I am only now exploring. Also as a last resort you can try applying for installment loan. Loans saved me once and they can save you as well.

As for credit counseling, it’s really important to try to find a reputable place that won’t make things worse.

Just google for “National Credit Counseling Foundation”.

If your debt is pretty high

If your debt is pretty high you may be able to close the cards and then negotiate a payoff schedule with a better interest rate.

My own story is:

$53,000 in debt by an irresponsible and untrustworthy spouse (since divorced)

I closed Mastercard, Citicards,Discover, JCPenney and Macy’s and negotiated a positive cash flow in their direction. I do not use any credit cards I instead rely on an ATM Visa and once in a while use the credit facet of the card as opposed to the Debit facet (less bank charges believe it or not!)

Here is the result:

  • $31,000 on Mastercard 550/month at %3.25 for 6 years
  • $8500 on Citicards 350/month at %9.9 for 3 years
  • $13,000 on Discover card at %18 forever ( I had the most problems with this card)
  • $3000 on JCPenney $65/month at 0%
  • $250 on Macy’s pd in two payments

In 21 months here is where I am at:

  • Macy’s and JCPenney are paid off because I aggressively paid them more than I had to.
  • $23500 owed on Mastercard at the same rate.
  • $2450 owed on Citicards at 21% with an end in sight
  • $11670 owed on Discover at 9.9%

With Citicards I complained that I wasn’t seeing the end soon enough. They offered me a ‘Half pay program” when I had 3600 owed. Here is the deal:

I pay 600 they pay 600 so my debt lowered by 1200 in one month.

That kind of knocked out a year of crappy interest payments so I went after the remaining debt aggressively. I’ll beat them down to nothing in a year.

Discover is its own battle and I wouldn’t recommend this card to anyone if they carry a balance.

I was in a payment plan I didn’t thoroughly understand at $394 per month at 18%. They also got over 800 from me to be in that plan when I was down and out in the beginning of Oct 2006. That money was ‘penalties that went nowhere toward the payment of the debt.PUNISHING!”

For 1 year Nov 2006 to Nov 2007 I paid faithfully from an agreed account.

It was good for one year. In December of 2007, they didn’t withdraw the money I placed there and instead hit me for 24% and a penalty.

I was outraged. I was told that if I was going to pay them the rate was going to 24% and I owed them a penalty.

I told them they weren’t getting paid.(I wasn’t nice I actually told them to go F themselves) I was going to pay everyone else and not them. So they said I didn’t understand credit card companies.

I said sure I do! I have your money and you don’t!

So 6 months later they made a deal at 9.9%. My ex spouse has to pay this card in my divorce agreement so I am ok with that.

Here’s a tip:

Don’t divulge a master bank account to a credit card company if they pull shady stuff like this.

Instead set up a temporary account with another bank.

In case you want to dig in they can seize your account funds if you have given them an account number.

Keep the minimum necessary to pay them in the temp account.

Good luck and keep asking for someone until they deal.

I filed a charge with the FTC on Discover because of how I was treated by them.

Keep this in mind 30% of the USA is in very real financial trouble and these guys are not getting paid. Foreclosures and bankruptcy are causing a lot of over extended banks,mortgage and credit card companies to go through layoffs and failures. The guy on the other end of the phone is nervous about his job too so they are more willing to make a deal to increase the bottom line. Be strong and if they offer you a deal try to get better than the offer. I hung up many times before I got Discover in the corner. They called me over 60 times. Then mailed me a deal!

I need your input really quickly

Hi, I’m new to linkwyoming and newly laid off (3 weeks). Like most, I am over my head in credit card debt. Here is my question. Has anyone used a reputable credit card debt consolidation company that are not frauds? And can someone explain the process and if it actually helps eliminate or consolidate debt. I’ll wait for replys. Thanks in advance for any help you can give me.

Here is a thumbnail of what I learned:

Based on my sisters situation, she owes three cards $35, 000

These steps may not apply to all debt fix companies… (be careful, I understand that some of the companies are involved in fraud)

I suggest that you get a referral from someone to find a safe one.

  1. 1. Sign up with the “company”.
  2. Open a special bank account, with the companies help.
  3. close the credit cards in question.
  4. let the acccount go into default.
  5. let the account go to a collection agency.
  6. my sister’s FICO score will go into the toilet, for a few years.
  7. start making monthly payments into the special bank account.
  8. the “company” will start to have talks with the credit cards.
  9. the company will establish a settlement with credit cards.
  10. with the clients approval the company will take money out of special account and pay settlement.
  11. some years later my sister’s FICO score will improve.

maybe I forgot some of the steps but that is close.

Credit cards will not settle for less money until you can no longer make payments, then they might expect that they will settle for less money instead of none.

A friend of mine says that some credit cards will sue the holder of the card for the debt.

Starting Out And Need Advice

Hello everyone thanks in advance for being available in this group and lending your thoughts and knowledge. No need to recommend the Dave Ramsey’s site, I am already checking it out. My wife and I are in a bit of trouble from some bad habits that I thought were broken.

We have four credit cards with about 40k worth of debt. We have paid our bills mostly on time, but at times had to use credit to pay credit. My wife pay’s the bills religiously, and the use of paying credit cards with our homes equity has really made matters worse. I am just as at much fault as my wife, so please don’t take this as blaming her. I think we are at a point that some bills are not going to get paid as I am taking over the finances and our mortgage is past due until I get paid.

Is paying credit at all cost the right thing to do? I do not believe obtaining more debt to pay credit is at all a sound decision, but really need some advice.

Should I notify the credit companies and other debtors that I will not be able to pay them, or offer a reduced payment?

Card1: 16.9% interest with about 2k used for overdraft protection, so it can get hit at any time.

Card2: 3.9% interest w/ 9k
Card3: 9.5% interest w/ 12k
Card4: 5.9% interest w/ 8k

I am still somewhat young and have about 3k in a 401k and thinking of cashing it to get rid of Card1 and set aside an emergency fund if possible, any thoughts and could this be done?

I believe we are just in the beginning of a serious hurt to come if I don’t turn the ship. I am looking to do things as best as possible since my wife worked so hard to pay everything on time and hoping the CC will be willing to work with me on our debt.

Hi. I think I am in about the same boat as you – except I have a bit more put into my 401K. And no matter what – there is NO WAY I will cash that in to pay my credit cards. I have heard different advice on this front, and will be interested to hear what the rest of the group says about this. I actually more than enough to pay off all my credit cards, but it scares me to death to do it.

Don’t use your 401K. By the time you pay penalties and fees, you’ll get next to nothing and you’ll lose so much.

Something free I suggest is to start watching Suze Orman. Her show’s on CNBC on Saturday nights and although people love her or hate her, she knows her stuff. And her advice is good. Her motto is “People first. Then money. Then things.” It’s helped me stay grounded in this whole mess of debt.

Another really good site I found is called Everyday Cheapskate. I can’t remember what it cost me, but it was somewhere in the neighborhood of $30 for a year. The most powerful tool for subscribers (besides the monthly newsletter) is called the Rapid debt repayment calculator. You enter your debts and interest rates. You can select to pay from highest rate to lowest, your own specific order, or let it order it in time to pay each debt off chronologically.

It breaks down how long in months it will take to get everything paid off, using a couple of methods: one, fixed payments (you keep paying the amounts you are now); two, falling payments (you pay less as the debts get smaller); three, once-monthly payments; and four, twice-monthly payments. It’s really great. It helped me see that I can get my $40,000 in CC debt paid off in four years. It’s possible. No matter how dark things look right now.

These are just places to start. I’m sure you’ll get a slew of more great advice.

Can someone give me some information?

Can someone give me some information? My daughter is facing foreclosure. She can either pay her credit card debt or her mortgage, not both. She is thinking that she will move home with mom (me) and let the house go into foreclosure and then she will work on paying off her credit card debt. Any advice on this? Does she need an attorney. The house will probably sell for less than orig paid because of the economy what will happen then, will they garnish wages. We don’t know where to turn on this. please help!

You may want to go to www.daveramsey.com for some advice. I am taking one of his classes and it has turned my budget and spending right around for the better. He advises to pay your mortgage FIRST no matter what. Then pay the things you need to survive – car, insurance, utilities, food. Send a monthly detailed budget to each cc company along with a small payment – that’s all you can pay – and do this faithfully. You can get better details on his website.

A home is a secured debt and a credit card is an unsecured debt. I would pay my mortgage and “charge off” the credit card. Then I would try to sell the home and if/when that happened I would pay off the credit cards. A charge off on a credit card might hurt your credit but it’s not as bad as a bankruptcy.

Never pay cc before Food, Shelter, Clothing and Transportation. CC may sue after about a year if there is no payment and the balance for each is greater than $5,000. The mortgage company WILL sell the property for whatever they can get and then come after your daughter with a vengeance on the balance!

Things are getting tighter and tougher with every pasting day. BUT we must be smart where every penny goes … When we have learned from experience it is only right that we share. That is how we become stronger as a people.

Also pay your mortgage, but don’t charge off your credit cards… It does hurt your credit as bad as a bankrupty don’t kid yourself! First try to call your Credit co. and move your debts to one cardif possible with the lowest rate… and keep doing that until you have all debt on one card… mean while write or cal them and explain your hard time so that it is in your file that you are communating with them , and even if you only have 5 bucks to send to each one, at least you are paying on your bill every month.

AND stop spending!!!! We paid off 10,000 this way and my credit is perfect ! Charge off’s make it hard for you to buy , rent or anything in the future for years and years and new cards or old ones will not be so easy to get at a lower rate. Most of our cards are at 1.9 3.9 and the highest 5.9%. If they offer the 1.9% for the life of the debt, take it !!! bounce your balances to get your interest rates under control is key. That extra interest is the extra payment to help you get a head. And start selling things you don’t need. American is cluttered and so are our homes!! Clean out, cash in and get the debt under control… You can not believe how good it feels!