<p>This is a bit of a naive question, but I was wondering what the best way to prepare for student loan debt is? I anticipate transferring colleges next school year, and while I currently attend a school I do not need to take out loans for, I expect to be taking out roughly $5,000/yr in loans for the next three years. I'm confident that I should be able to pay this off especially if I get a job relevant to my major, but I was wondering if there's a way to prepare for student loan debt that's beneficial in the long run or lessens the impact? Is it worth making a point of saving any disposable money/income I have now so it will be available to pay off loans on time or even early? Is it worth living very frugally my first few years out of college in order to pay off the loans faster if I'm not bothered by it? Thanks!</p>
<p>Unless you have an income source or assets to back it up, your first order of business needs to be finding a co-signer for your student loan, be it a parent, grandparent or guardian. That being said, you seem to have a good head on your shoulders re: your wariness at paying back these loans. Accrued interest adds up!</p>
<p>*Is it worth making a point of saving any disposable money/income I have now so it will be available to pay off loans on time or even early? *</p>
<p>It’s silly to “save” borrowed money. It’s better to borrow LESS.</p>
<p>*Is it worth living very frugally my first few years out of college in order to pay off the loans faster if I’m not bothered by it? *</p>
<p>Yes…a good idea. That way you can more easily purchase a home or whatever.</p>
<p>Unless you have an income source or assets to back it up, your first order of business needs to be finding a co-signer for your student loan,</p>
<p>??? This student does NOT need a co-signer for that amount.</p>
<p>If the loans will be limited to around $5,000 a year then the student will be able to borrow federal student loans. These do not require a cosigner or any sort of credit history or job. All that is required is that the student file FAFSA.</p>
<p>What m2ck said - use earnings while a student (or reduce expenses - roomates, buy/sell used books, term & summer employment) that reduces your borrowing or enables quick pay-back of principle will help you get established much faster. Although $15,000 may not sound like much, it is the equivalent of a car loan, to put it in perspective. </p>
<p>Figure out the likely payments following graduation (make sure you account for how interest is handled while you are a student) and compare as % of salaries, and consider what-ifs (grad school, prolonged job search, unpaid internships) that will increase the relative cost of the debt. Debt is not inherently bad or evil, but recognize student loan debt is a special type - you MUSt pay it off, it is not dischargeable in bankruptcy, do you want to start out oweing that amount of money?</p>
<p>Evaluate why you are transferring. It may well be worth taking on the debt to get into a significantly better program, major, school with better pipeline to employers/grad/prof schools. Better social life (at the other extreme) is not a good reason. Good luck.</p>
<p>Thanks for all of your replies. Ultimately I think it’s in my best interest to transfer if everything goes as planned, but I wanted to make sure there were optimal ways of paying off the loans.</p>