Friday’s Fact

Check in each Friday for your weekly Get College Smart Fact.

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I’m taking this week’s fact from a CNN report I heard earlier this week, which stated that the number of college graduates declaring bankruptcy is on the rise.   While this certainly is not welcome news for those of you who are currently in college, I wholeheartedly agree with Benjamin Franklin’s statement that “An investment in knowledge pays the best interest.” 

So what knowledge do you need to avoid the debt crisis that a number of college grads are currently facing?  Here are a few take home lessons.

• This fact is a result of a weakened economy and it highlights the need for everyone to be smart about money – especially college students
• Remember that all the money you borrow for college will need to be paid back eventually.
• Student loans typically go into repayment 6 months after you graduate.  While there are options out there that allow you to defer payment, these options have limits as well. 
• Interest still collects on your loan during the repayment period, even if your loan is in deferment. 
• Your monthly loan payment can take up a large portion of your income, assuming that you have a job when you have to make those payments.

All in all, you should not borrow more than you need to pay for your school expenses, and you should seek other sources of income to help you pay for your education!

(Now that’s the kind of knowledge that really “pays the best interest”!)