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Student loans: how to handle education debt

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Erin Jones 

Contributor

Most students don’t want to think about their student debt, but there are methods of responsibly paying off loans. 

“Unfortunately, almost every student has student loan debt,” said Jacob Lunduski, a financial industry analyst for Credit Card Insider.

The average student in the class of 2016 had about $37,172 in student loan debt, according to Forbes. 

The key to a simple resolution of loans is having good credit.

“Establishing credit at a young age has many benefits that can put you ahead of your peers,” Lunduski said. 

Credit scores affect things like getting loans for a car, a house or apartment, insurance or even a job. About 65 percent of a credit score consists of making payments on time and in full, when possible.

Credit cards are an excellent way to build credit, when used in moderation and with discipline. 

In order to get a credit card, students might require a co-signer or a consistent income if they are under 21. 

“Make sure you fully understand the basics of credit cards and use them as if they’re connected to your bank account,” Lunduski said. 

A good credit score can impact interest rates on loans and make it easier to pay them off. 

Paying off these loans is when most students start to feel overwhelmed. 

“Before spending, know the difference between things that you want and things that you need,” said Joyce Vail, a sophomore business major from Union Springs.

Once you start paying off your loans, Lunduski suggests using the “debt avalanche method,” which consists of paying off the loans with the highest interest first. Make minimum payments to any remaining loans, and once the highest loan is paid off, repeat the process with the loan with the next highest interest rate.

Saving is a fundamental part of paying off loans. Having and managing a savings account can be the difference between falling into debt and being able to responsibly handle your loans. Getting a job and setting aside a set amount of money per paycheck can also add up over time and be used toward your student debt.  

Some apps can also generate some money by investing in stocks. Apps like Acorns, Robinhood and Stash transfer and invest small amounts of money.

“I feel like students feel stretched between a lot of competing priorities,” said Jonathan Cellon, an associate dean of first-year studies.  “There are other expenses to attending and trade-offs with choices.”

Despite the financial pressure, Cellon said most students might not understand the importance of graduating. 

“Students are increasingly understanding the hard choices around attending a four-year college,” Cellon said. “I think that most students understand that this is an investment that will have a financial return.”