College students' debt management

Before investing in a post-college education, many students ask themselves questions such as "How much should I spend on school?," "How much should I borrow in loans?," "How much student loan debt is too much?," and "How can I attend school and keep my credit clean?" There is no one-size-fits-all answer to these types of questions; however, thinking about what's personally comfortable for YOU can make your future debt management efforts easier to handle.

Advantage CCS is happy to help young adults get on good financial tracks with their debt management and credit counseling programs, including online credit counseling. There are debt management services to suit all sorts of situations and budgets - and these plans can take into account your plans to attend graduate or professional school. Statistically speaking, you are likely to have almost $20,000 in student loan debt from undergrad; according to Generation Debt author Anya Kamenetz.

There are some types of schooling that will allow you to pay back your loans fairly easily once you begin your career. Medical school, for example, can certainly be worth the thousands of dollars of debt you are likely to incur, because you will be able to earn enough money to pay the debt down. For example, the average family practice physician can earn $137,119, according to the United States Bureau of Labor Statistics. However, seeking a PhD in an obscure or low-paying humanities discipline - or, choosing to go to an expensive, top-tier school -- might not wind up working out in your financial favor.

Professorial teaching appointments, for example, are competitive, and there are far fewer of them than there are interested PhD-holders in the United States. Many students are awarded assistantships, which can help to offset schooling costs. However, if you already have undergrad loans to pay off, it might not be worth risking your financial health and credit score to go into a low-paying and competitive field, where tenure track is the exception, and part-time or temporary appointments are the norm.

Another major cause of student loan debt, surprisingly, is law school. Facing rapidly rising tuition costs, many law schools continue to increase their prices. According to a Feb. 2006 article issued by The Law Journal, for example, increases in law school tuition are out-pacing entry-level salary increases at many firms. And, many members of a law school's graduating class, believe it or not, will NOT get the big-bucks jobs. In order to make partner at a high-paying, large public firm, a student must be a top performer, and must work for 60-80 hours per week for several years. Many students wind up at smaller firms, or work as public interest lawyers, so their compensation might not be adequate enough to offset large loan payments. Still other students, after earning their JDs, do not practice law at all.

The biggest downfall for professional school students, however, is living beyond their means while still in school. Taking out large loans to fund a fun lifestyle - which can be tempting whether you're studying in New York City or Pittsburgh, Pennsylvania -- will catch up with you, the student, later on. Paying a modest amount for rent each month, and limiting frivolous expenses like designer clothes, trendy concerts, and top-shelf alcoholic drinks can help students enter the "real world" after professional school in as little debt as possible.