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NJCLASS Solutions keeps you in the right credit direction with Real Money 101 credit tips!
Basic steps to minimizing your
student loan debt






Choose a college that fits the family budget

Picking a school is an economic decision as well as an academic one. In a survey by Fastweb.com, 45% of students ranked "quality of major" as their top reason for choosing a school. But "scholarship or financial assistance" (43%) and "total costs" (41%) came in a close second and third -- even higher than "academic reputation" (38%). Among students who leave school with no debt, 85% graduated from public colleges, according to a report by Mark Kantrowitz, publisher of FinAid.org. REMEMBER!!!! Selecting an affordable school doesn’t have to mean sacrificing quality.



Choose a marketable major

Always choose fields of study that are in demand. That doesn’t mean you have to major in engineering or computer science. But if you are majoring in economics, it couldn’t hurt to take accounting. If you are studying history or government, you could learn a foreign language. And if you insist on studying something as unstable as journalism, you should minor or concentrate in another subject -- such as business, health or computer.




Sidestep the typical 4 year college plan

Starting at a community college and transferring to a four-year school can save a student thousands of $$$. Students can reduce their expense by enrolling in Advanced Placement (AP) courses in high school. Sometimes these courses can qualify for college credits through the College Level Examination Program.


In Kantrowitz's study, half the students who graduated with no debt graduated from a community college (one-third graduated from a public four-year college). Other hallmarks of students who graduate debt-free: They tend to spend less on textbooks -- $1,000 or less per year and are more likely to live at home with their parents.



Savings + Scholarships + grants = FREE $$$$

It's never too late to save, check and see if you live in a state, like New Jersey, that allows your investments to grow free from Federal and New Jersey state income tax. Qualified withdrawals are also not subject to federal or state income tax with a state sponsored 529 plan such as NJBEST.


FastWeb.com lists scholarship and grant money where your high school grades rank and personal successes would make you standout for particular scholarships and grants. Check with all of the schools you are interested in and see what scholarships they have to offer as well as local foundations and community groups.


Always apply for federal student loans first!

Almost all students rely on student loans to finance at least a portion of their education using federal government loans. These loans have low interest rates and do not require credit checks or collateral. Student loans also provide a variety of deferment options and extended repayment terms. Federal student loans include the Federal Direct and Federal Perkins Loans. Also have your parents look into the Federal PLUS loans for parents. (For more information on student loans, go to StudentLoans.gov.)


Private and Supplemental Loans

If all of your college expenses are not covered by the scholarships, grants and federal loans you are awarded, you can apply for a supplemental loan like NJCLASS. NJCLASS helps bridge the gap between the actual cost of your education any scholarships or grants you receive and the limited amount the government allows you to borrow in its programs. 


ALWAYS!!! try and to pay all or part of any loan interest as it accrues so that it isn't added to the balance that has to be repaid. Remember that even the best student loan can be a dual-edged sword, students borrowing more than they need to will lead to possible credit woes down the road.


When borrowing, borrow smart!

Try the Student Loan Advisor calculator at FinAid.org. It provides an estimate, of the amount of college debt you can afford based on starting salaries of your major, of the maximum in student loans your child should take out and how much it will cost to pay it back.


Finally, students should try to limit their total borrowing to no more than their expected starting salary when they graduate. A rule of thumb is "if you borrow more than twice your expected starting salary, you will be at high risk of default."


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