Many New Jersey college students are on summer break, and classes could be the last thing on their minds. But it’s a good bet plenty of them are thinking — or worrying — about their student loans. They’ve got plenty of company: The Federal Reserve Bank of New York estimates there’s $1.5 trillion owed as of the first quarter of 2019.
They’ve also got some help: the Student Loan Task Force of the New Jersey Society of Certified Public Accountants (NJCPA) has developed a borrower checklist to make students and parent know what they’re signing before they reach for the pen:
Know what you’re agreeing to, such as loan terms, payment options, interest rates, and fees.
Know your credit score and the factors that affect it. Investigate whether to refinance/consolidate with favorable terms.
Take advantage of a co-signer to secure the lowest rate possible.
Set a monthly budget and include your student loan payments as a line item.
Know your strengths; find a secondary/tertiary job in the growing “gig” economy.
When considering multiple loan offers, be sure to take into account the value of a fixed rate. While fixed rates may be higher than the comparable variable rate offers, variable rates are subject to change in the future.
Choose a lender with no prepayment penalties and take advantage of it — an extra $100 a month can save thousands of dollars in interest.
Borrow as little as possible to get through your education.
Research, research, research! Depending on the type and size of loan, job, lender, and state of residency, there may be tax strategies and/or loan-forgiveness programs to take advantage of.
Be thrifty now to live a debt-free life later.