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Question for the Money Doctors

Question submitted on May 19, 2013.


How might an individual get an education on borrowing and managing personal debt?


The key is to make sure debt repayment is realistic. The formula to keep in mind is: post-graduation income living expenses + debt repayment + saving. In other words, one must determine a realistic expected income after graduation and only take on debt that can comfortably be repaid (while starting to save for a first home, retirement, etc.)

To avoid or limit borrowing to get an education, explore the many alternatives to traditional on-campus programs--or combine alternatives. For example, starting at a community college and transferring to a more expensive college can save much money. Explore getting college credit with CLEP or other college credit services. Many universities offer distance education programs that are either more affordable or offer more flexibility to work and study than on-campus programs. A Google search for “college planning software” will return some helpful resources to evaluate academic and financial aid options. Think of getting an education as buying a pair of shoes. You want to choose something that (a) fits you, (b) gets you to where you want to go, and (c) you can afford.

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