Education can be costly for borrowers - WALB.com, Albany News, Weather, Sports

Education can be costly for borrowers

June 15, 2006 

Albany-- Many college graduates leave school with much more than a degree.  Often they have a mountain of debt. The National Center for Education found that 2 out of 3 undergraduates will go into serious debt because of student loans.  

College sophomore Jaketa Hardnett has big dreams of teaching tomorrow's leaders. "I love children," says Hardnett. It's a dream of teaching that's costing her a pretty penny so far. "$10,000 right now," says Hardnett.

It's a growing school debt and Hardnett only found one way to pursue her passion for education. "The only way I'm paying for school is student loans," says Hardnett. And she's not alone.  Some college students have to pay for everything from dormitories to expensive books.  In Georgia, 65 percent of students graduate owing the government close to $19,000.

"College is a very expensive endeavor as we all know these days," says AG Edwards Financial Consultant Victor Sullivan. In July, that education will be even more costly.  Interest rates on Stafford Loans will jump from 5.3 to more than 7 percent.  Financial Consultant Victor Sullivan says it can already take college grads several years to pay off school loans.

"We work with a lot of people that are professionals now that are several years out of college and are still paying back loans from college. It is not unusual," says Sullivan.

But there are ways to make sure they still have a profitable future.  Sullivan says borrowers should make sure loan payments are made on time and even though it may be a squeeze, use any extra money to invest.  Even if it's as little as $25 a month.

"It's just monthly investing. When you go to work for a company, they have some kind of retirement plan like a 401k or simple plan or some sort of an IRA," says Sullivan. 

This future teacher is banking on a successful career in education but she isn't thrilled about the costly loans it will take to get there. "That's awful. I'll be paying them off for awhile," says Hardnett.

But she says the money is worth it for her dream and it's a lesson she shares with millions each year.

PLUS Loan interest rates will also rise on July 1st. Those are loans parents can get for students. They'll jump from 6.1-percent to nearly 8-percent. Financial planners suggest looking at the possibility of locking in a lower rate with loan consolidations. Parents can also begin saving early with special education accounts for their kids.

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