Going to college? Educate yourself on ways to control student debt.

College GraduatesDealing with the financial aftermath of attaining a higher education can often be challenging, if not overwhelming. Here some guidelines that can help you make sure student debt doesn’t haunt you for years to come.

Have a realistic plan. Try to determine how much student debt you can afford to repay by considering your future income potential. The U.S. Bureau of Labor Statistics provides wage information that can help you come up with an earnings framework. Try to keep monthly education loan payments to less than 8-10 percent of your gross monthly income. Remember, you may have other debts, such as a car loan, to repay as well.

Borrow only what you need. You don’t want to borrow money you won’t use for schooling. And try to complete your degree on time. The longer you extend your school enrollment, the more interest on your debt you’ll have to pay.

Look for subsidized loans. To apply for federal student aid, you’ll first need to complete the FAFSA (Free Application for Federal Student Aid) — which provides you access to the largest source of financial aid in grants, loans and work-study funds.

Pay at the least the interest on unsubsidized loans. Interest accumulates as soon as an unsubsidized student loan is disbursed. Making interest-only payments on your loans while you’re in school means you’ll leave college owing significantly less money.

Try to get financial aid. The U.S. government offers a resource for learning about federal student aid at studentaid.ed.gov. For information about grants and scholarships, visit the U.S. Department of Education at ed.gov or try fastweb.com for other possible scholarship opportunities.

It’s wise to investigate all your school financing options before taking out a private loan. If you decide to go with a student loan from a financial institution, Allsteel Credit Union offers student loans at competitive rates.

Additionally, you might want to consider our home equity line of credit. It could offer a very attractive rate, along with the benefit of tax-deductible interest. Be sure to consult your tax adviser for details.

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