Career Services helps students plan for paying back their loans
With the increased cost of higher education, many students are taking on increased debt loads. But if students borrow too much, they could graduate with debt that is out of sync with their earning potential.
Paying for College
More Western families receiving financial aid
A common rule of thumb: Never borrow more than you expect to earn with your starting salary. For example, according to the National Association of Colleges and Employers, starting salaries for elementary school teachers, social workers and journalists are about $30,000 a year.
A student who borrows that amount can expect a monthly payment of about $345, based on a standard 10-year payout. That's about 17 percent of their take-home pay.
That's do-able, but with less than $2,100 montly earnings after taxes, it will leave little to spend on anything other than essentials and will make it almost impossible to save.
To make monthly payments more manageable, some people opt to extend the payout. But 20- and 30- year repayment schedules means students could still be paying off student loans when their own children are heading off to college!
It's more important than ever for students to have accurate information about starting salaries and develop the financial literacy skills to make wise decisions about how to cover their educational expenses.
The Career Services Center's website includes a new section called "Dollars and Sense" with links to resources that will help students make the connection between degrees and occupations – and average starting salaries. Calculators will help students figure out how much debt they can comfortably handle on their projected earnings.
Finally, there will be information to help students explore part-time work and internship opportunities to earn money and help pay for their education and avoid taking on excessive debt.