Investing in Your Education â€“ College Loans Give Graduates One More Test to Pass

Since finishing school in May and June, many college graduates are realizing that there are many new experiences, challenges and opportunities ahead. Between finding a job, moving away from home, leaving comfortable sets of friends behind and giving up the flexible college schedule for the more rigid 9-5 work week, there are many changes that come with finishing school.

In addition to all these changes, students also begin to work toward achieving financial independence. Throughout college, most people find that there is more money going out than coming in, as they are paying for tuition and living expenses and have little or no time to hold down a paying job. As a result a certain amount of debt accumulates. While there is the plus side that finishing college means graduates will have the chance to put their skills to use in jobs that will earn them money, graduation also marks the point in many peoplesâ€™ lives where they take on full responsibility for their finances, without the support of family or college financial aid advisers.

While graduates that find jobs are excited at the idea of having a regular income, they also find that their money has to go in many different directions. Rent, food, health insurance, car payments all must be taken into consideration in addition to student loan payments. With the constantly rising cost of college tuition and pressure to attend the top private schools, todayâ€™s college graduates can find themselves with debt in the six figure range. Once the grace period expires, newcomers to the workforce can find themselves facing student loan repayment programs that resemble a mortgage.

In order to combat this situation (which can certainly be overwhelming to someone that is new to not only the workforce but also new to managing their own money) is to create a budget (check out tips for this in our June 20 post) so that you can effectively manage your income and make sure you can pay all the bills that arrive each month. Others would say that a good first step is to make sure that you have a loan agreement you can live with in the first place. Janice Lieberman discusses this issue in a recent article on iVillage.com. Realizing that the cost of college is going up, Lieberman states that many borrowers are having to go to private lenders for their college loans, rather than relying on school and government-run programs.

Especially when it comes to the first child in the family to go to college, parents and students alike feel a great deal of uncertainty when it comes to selecting the proper lender, establishing an appropriate payment plan and actually beginning to repay students loans. While it may be an intimidating issue, it can be made less scary by taking a proactive approach, getting the facts by reading articles like Janice Liebermanâ€™s and then taking the time to weigh the options and make a choice that everyone is comfortable with. The bottom line is that while college can take away a good portion of your income for a few years, most people would agree that a college degree is a valuable asset and something that no one can take away from you.

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