Friday, November 21, 2008

Planning for College? Think Ahead to Manage Your Debt

The average debt load for the class of 2007 in Pennsylvania was $23,613. This happens to be the sixth highest in the country. Here are some of the published average debt levels for graduates in the region: (Source – PennLive)

$27,566 at Lebanon Valley College
$26,300 at Penn State
$22,853 at Dickinson College
$20,256 at Shippensburg University
$19,555 at Millersville University

You will notice that the state schools, Shippensburg and Millersville, although lower are not that much lower. The question is whether or not this is good debt or bad debt. It certainly is better than having a car loan. Everyone knows that as soon as you drive off the lot with a new car, it begins to depreciate. In simpler terms, the older the car, the more wear and tear and therefore the lower the value of the car!

That is the exact opposite of the education loan or it should be. The older you get, the more career mileage you get, the more valuable YOU become. As long as you are outpacing the interest on your education loan, and growing your career, the better life should be for you.

That does not mean that college students should go loan crazy. Remember that they will need to be paid back. The more you can do to limit loans eg part-time jobs or community college, the better able you will be to buy that nice car after graduation and the sooner you will be able to move into your own place.

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