With fall tuition coming due in the next few weeks, Sallie Mae, the nation’s No. 1 financial services company specializing in education, offers families new resources to help them make informed paying-for-college decisions.
Online PR News – 09-July-2012 –With fall tuition coming due in the next few weeks, Sallie Mae, the nation’s No. 1 financial services company specializing in education, offers families new resources to help them make informed paying-for-college decisions.
Available through its financial literacy website, CollegeAnswer.com, Sallie Mae offers tips and tools to help students avoid borrowing more than they need to pay for college.
- Talk to someone trustworthy who is experienced in money matters. Perhaps that’s a parent or grandparent. Or, it could be someone in a school’s financial aid office. This will help to learn tips and gain valuable real-life perspective.
- Finance the education, not a lifestyle. Don’t borrow more than is needed. Remember that student loans are intended to finance school expenses, not a lifestyle. In fact, each school will usually be asked to certify that the loan will be used for school expenses. Remember, every dollar not borrowed is a dollar — plus interest — that doesn't have to be payed back later.
“Sallie Mae’s longstanding advice has been for students and families to follow its 1-2-3 approach to paying for college.”
- Think about life after college — there are sure to be new expenses, such as a new car, a vacation, or, eventually, a home mortgage payment. Smart planning now can help afford those things later.
- Be responsible. Before agreeing to the terms of a student loan, find out what the expected monthly payments will be once the loan is in repayment. Keep in mind that one may need additional student loans to complete a degree – or even for graduate school. Being comfortable with the projected repayment amount is part of being responsible.
- Borrow less than what one expects to make the first year out of college, say many experts. While it’s not guaranteed that one will earn this amount, one can estimate what their potential first year’s salary might be. The U.S. Department of Labor offers a helpful salary estimator.
- Be aware of a future debt-to-income ratio. Generally, a financial advisor will encourage people to understand their “debt-to-income ratio”—that is, the total monthly debt payments as a percentage of what one earns every month. Sallie Mae’s Education Investment Planner can help calculate what starting salary one will need in order to afford their student loan payments. One rule of thumb: student loan payments are likely to be manageable if they are 10 percent or less of a starting salary. For example, if someone graduated with $25,000 in student loans (a typical amount for the 60-some percent of college grads who borrow), the monthly payments would be $288, so they would need a starting salary of approximately $35,000 to easily manage these payments.
Sallie Mae’s longstanding advice has been for students and families to follow its 123 approach to paying for college: first, tap college savings and maximize scholarships and grants. Second, explore federal student loans. Third, fill the gap with a responsible private education loan with a choice of in-school payment options to help save money.
Join the conversation on how to save, plan and pay for college at Facebook.com/SallieMae.
Sallie Mae (NASDAQ: SLM) is the nation’s No. 1 financial services company specializing in education. Whether college is a long way off or just around the corner, Sallie Mae turns education dreams into reality for its 25 million customers. With products and services that include college savings programs, scholarship search tools, education loans, insurance, and online banking, Sallie Mae offers solutions that help families save, plan, and pay for college. Sallie Mae also provides financial services to hundreds of college campuses as well as to federal and state governments. Learn more at SallieMae.com. Commonly known as Sallie Mae, SLM Corporation and its subsidiaries are not sponsored by or agencies of the United States of America.