What to do to Avoid Risks of Rising Student Loan Debt
What to do to Avoid Risks of Rising Student Loan Debt
Recently, the student loan debt exceeded $1 trillion for the first time ever and as a result, Americans have been struggling more than ever. Moreover, based on a report by Project on Student Debt, the average student loan debt in Florida is increasing faster compared to any other place in the country.
However, there are still options you can choose from to prevent yourself from being drowned with student loan. According to Karen Carlson, director of education for InCharge Debt Solutions, which is a consumer credit counseling service based in Orlando, to avoid an unpleasant state, you can look for some advice at the start.
In addition, Carlson said that taking on a large amount of student loan debt might lead to a financial disaster, especially if you already have previous debts, get laid off, encounter health problems, or other unprecedented circumstances.
One of the best ways to avoid being trapped in student loan debt is to have a savings plan even prior to the initial college bill. Several people utilized tax-exempt educational-savings accounts, but they are less favored these days because of poor returns. In turn, others rely on Roth IRAs, which let you take out principal tax-free if it’s going to finance educational expenses.
According to Dennis Nolte, financial planner at Winter Park and senior vice president at Capital Guardian Wealth Management, the public must have a comprehensive strategy to handling college expenses, in order to lessen their dependence on student loans. For instance, they must compare different schools or do a cost-benefit analysis of courses based on their income potential in the future.
Also, parents must encourage their children to take part in the financial planning process as early as possible, so that it will be instilled in their minds that they should work and save money for their college education, and also set definite goals to achieve later on.
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Filed under: debt • Loans • Student Loans
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