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August 6, 2019

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.

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