Financial experts offer advice on repaying student loans, paying for college
CHICAGO (WLS) -- Nearly 44 million Americans have student loans totaling more than $1.6 trillion, according to the New York Federal Reserve.
Starting September 1, interest will start accruing again on student loans. In October, borrowers will have to resume payments again after a three and a half year break.
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For students who graduated during that break, they'll have start paying for the first time. Frank DeVincentis is Managing Director and Financial Advisor with the Chicago Group at Morgan Stanley. He urges borrowers to get organized.
"About 44% of servicers that usually take care of these loans have changed since then," DeVincentis said. "People that have these loans need to go figure out who these servicers are. Get in touch with them to learn about their repayment expectations and then start to budget how they're going to do this in October."
And he advises against missing a payment, that can impact your credit. "So forming that budget even setting it up for auto pay so that the first thing that goes out in the month, the first thing after you receive your payroll, you're making that payment and it's outside that checking account, you're moving on from there." For those borrowers who might be looking for some kind of debt relief, DeVincentis says beware of scams, "This is kind of rife for opportunity of people reaching out and saying 'oh we're going to help with your debt relief or loan forgiveness' The only person or the only entity that can actually forgive you is the federal government. So there needs to be a direct interaction with the servicer in that regard. "
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For students who are just starting college or will be sometime down the road, the question is how to graduate with a degree, but without a mountain of student debt.
Forbes has reported that the average borrower in the U.S. owes nearly $29,000. Ann Garcia is a certified financial planner in Portland, Oregon and the author of the book "How to Pay for College: A Complete Financial Plan for Funding Your Child's Education."
She has this advice for families and saving for college, "It's never too early to start and it's also never too late to start. The earlier you start the more opportunity you have to save, to research colleges and find the ones that are most likely to offer scholarships to your student."
Garcia urges families to sit down and talk finances.
"It is so important to have a conversation, to be candid with your kid about what level of financial support you're able to offer before they get into the process of applying for colleges because there are loads of colleges out there that will educate your child at the price point that works for you," Garcia said. "They just have to know what that price point it and what they're looking for. It is important job for parents to give their students some parameters in that college search."
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