Potential Magazine College and Career Organizer 2020

pay the way Sponsored by: student loans 101 College Loans: What You Give Up TO PAY OFF IN 20 YEARS: Plenty of students and/or their families have to borrow money to afford college, but when it comes to student loans, it’s easy to get in over your head if you’re not educating yourself. Here’s what you need to know about loans, and how to know when to say when! $25,000 Student Loan Monthly payments: $150-200 Needed salary: $30,000 - $40,000 Equivalent to: a used car payment $50,000 Student Loan Monthly payments: $300-390 Needed salary: $40,000 - $50,000 Too many students are reaching graduation full of excitement only to be hit with a harsh reality: the sizable chunk of money that paying off student loans will take out of their budget. Un- fortunately, most young adults are often unaware of what their debt will cost them each month until they see their first student loan bill. Don’t be caught by surprise! Equivalent to: a new car payment $75,000 Student Loan Monthly payments: $450-580 Needed salary: $60,000 Equivalent to: an apartment rent Interest-ing? Maybe not, but it is important: Interest is the money you pay to your lender in exchange for borrowing money. Interest is calculated as a percentage of what you borrow. Without interest, lenders would have no incentive to give out loans; in order to make it worth their while, they expect to get back from you more than you borrowed. $100,000 Student Loan Monthly payments: $600-775 Needed salary: $80,000 - $90,000 Looking at the Average Borrower: Equivalent to: a modest mortgage The average student loan debt in 2016 was $37,172. Let’s assume that you are the average borrower, and have a Stafford student loan with an interest rate of 6.8%. If you pay roughly $280 per month toward your loan, you will have paid $30,927 in interest alone, for a total of $68,099. That’s almost double what you originally borrowed, and it will take you twenty years to do it! loan interest total $37,172 + $30,927 = $68,099 what y ou borrow t h a t ’s a car! what y ou pa y $150,000 Student Loan Monthly payments: $900-1200 Needed salary: $100,000+ Equivalent to: a house and car payment *Amounts may vary; some loans require a certain minimum monthly payment You’ve probably heard that some careers allow your student loan debt to be forgiven, but it’s not as simple as it sounds! The Public Service Loan Forgiveness (PSLF) program may qualify you for loan forgiveness if you work full-time for a qualifying employ- er (government organizations, non-profit organizations, public service, etc.). But here’s the catch: You still must make 120 monthly payments under a qualifying repayment plan before you will quali- fy for forgiveness. For more information, visit https://studentaid.ed.gov/sa/repay-loans/for- giveness-cancellation/public-service. 48 | College Organizer 2020 www.potentialmagazine.com

Potential Magazine College and Career Organizer 2020 | Page 48