Student Loan Tips

- Hi I'm Jean Chatzky, and this is your SavvyMoney Minute.

- [Announcer] Brought to you by Credit Union of Southern California.

- You probably know that student debt is a trillion dollar problem. But it doesn't have to be a problem for you. The key, borrow what you can afford and pay it back fast and cheap. Here are my favorite tips. First, your borrowing level should match your first year's potential earnings. Heading to Wall Street or a legal career? You can borrow more than a future teacher. To keep debt down, go to a school that offers grant money, or start at a community college and transfer your credits later. Also, get all the federal loans you can first. The private market is pricier. And when it comes to paying back that student debt, pay back the more expensive private loans first, and stay on schedule with your federally subsidized loan payments. If money gets tight, look into income-based repayment for federal loans. 25 years from now, if you still have debt, your slate will be wiped clean. Finally, be careful. Consolidation plans can give you some breathing room by extending the term and lowering payments. But the same average interest rate will apply over a longer period. So in the long run, you'll pay more. If you can apply those savings to paying off higher interest rate credit card debt, you'll come out on top. Stay savvy. I'm Jean Chatzky for SavvyMoney.

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