College Econ 101: How to minimize debt

May 22, 2011 5:27:57 AM PDT
Getting a four-year college degree can cost tens of thousands of dollars. To pay for that, a lot of students get loans and financial aid, which then leaves them with high bills to pay off after graduation.

As students apply for money, Joan Jensen, president and CEO of Central Credit Union of Illinois was in our ABC7 studio to talk about ways to keep down the debt.

Student Loan Debt:

- Credit scores for delinquent borrowers can be negatively impacted and possibly prevent them from obtaining additional credit at favorable terms.

- If borrowers default, they are ineligible for additional loans or grants, and the federal government can seize their tax refunds, garnish wages, withhold Social Security, and charge significant collection fees.

- Bankruptcy is usually not an option to forgive student loan debt

Understand the Options:

- Deferments are given to new graduates and other qualified borrowers. Be sure you understand how the interest will accrue on your loan if you delay making payments.

- Forgiveness is when part or all of your debt is cancelled.

- Forbearance is the restructuring of the terms and payments of the loan.

Borrow the Least Amount Possible

- Two-year Community College: good option for first two years of school to minimize college expenses. Your diploma will still carry the name of the four-year school where you finish, but you'll saved two years worth of higher tuition and fees.

- Financial Aid Options: Apply for grants, scholarships, and other financial aid.

- Work-Study Programs: Study-friendly, part-time employment while attending school.

- Careers with Tuition Reimbursement

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