How to help your high school grad understand student loans
Federal student loan funds max out at $31,000
(InvestigateTV) — High School graduates entering college this year could take on $37,000 in student loan debt, according to a new analysis from NerdWallet.
This estimate reflects the average cost to receive a bachelor’s degree from the most affordable public universities and colleges.
While not all students will borrow that amount, some may need to borrow even more.
Elizabeth Renter with NerdWallet cautioned the maximum available in federal student loans is $31,000. For any amount over that, students will need to find other financing options such as private student loans or parent plus loans, which are federal loans given to the parent, rather than the student.
“A word of caution when it comes to that. A couple of years ago, we fielded a survey and found that 26% of parents that took on parent plus loans said it impacted their retirement plans,” Renter said. “So, we would strongly urge parents to think carefully before they take on debt for their student’s education.”
Renter also reminded students and parents to fill out the Free Application for Federal Student Aid (FAFSA) every year.
“We recommend you don’t wait until the last minute. Some of the money that the FAFSA allocates is first come, first serve,” Renter said. “There are limited pools of money when it comes to grant aid, especially institutional and state grant aid. So, the sooner you can get that filled out and turned in, the better.”
Lastly, Renter urged students to use all resources available to them to help apply for scholarships while in their last year of high school. College students should also work with their institution to continue to apply for scholarships throughout their tenure, since scholarships are available for sophomores, juniors, and seniors in college.
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