Be Smart about your Student Loans

Student loans make a lot of sense when it comes to financing your education. However, before you borrow from any student loan program, be sure to investigate all sources of student aid that do not have to be repaid such as grants, scholarships, and employment opportunities. These gift, or free aid programs, and employment opportunities can help to reduce the amount that you will need to borrow, while you are pursuing your educational goal.

While repayment of your student loan doesn't begin until six months after you leave school or drop below half-time enrollment status, it's important to understand that what you borrow each year will have an impact on you and your lifestyle for years to come. You don't want to overburden yourself with debt and graduate from school owing more than you can afford to repay.

Here are a few tips:

• Manage your student loan debt by deciding how much you can afford to borrow and how much you can realistically repay.
• Determine your earning potential by researching entry-level salaries at America's career InfoNet.
• Ensure that your student loan payment won't exceed 8% of your total income. Use our interactive loan calculator to estimate your monthly loan payments.
• Understand the costs of attending college and then plan an in-school and after-school budget before you take out your first student loan. Visit www.mapping-your-future.org for a handy budgeting tool.
• Compare borrower benefit programs. Borrower benefit programs are benefits offered to the borrower to help reduce the cost of student loans. With New Mexico Student Loans, you can save up to 30% on the cost of your student loans.
• Keep track of how much you owe. Track your student loans using the U.S. Department of Education's central database for student aid records, the National Student Loan Data System (NSLDS).

A word of caution - Many credit card companies are soliciting business by offering college students credit cards, usually at high interest rates with annual fees. Students may find themselves overburdened with debt. Be aware of these types of credit card offers. If you find yourself in trouble, Consumer Credit Counseling can provide a way out. Visit their website at www.cccssouthwest.org for more information.