Use Loans Carefully, Students Advise

Find out how an undergrad and a law student are managing their student debt.

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The high cost of college education.
The high cost of college education.

Summer is winding down (though the heat continues to rise) and students are preparing to head back to school. As you're considering loans for school, think about minimizing your borrowing and avoiding spiraling debt.

At the Student Loan Ranger, we have some great summer interns willing to share their experiences with borrowing for school and how they've learned to use that money wisely.

[Get federal student loan counseling online.]

Rashida Aluko-Roberts is entering her sophomore year at Gettysburg College. She writes of lessons learned and the scary nature of student debt:

As I walked out of the mailroom, I eagerly opened the envelope with the excitement of a child on Christmas day. Finally, I thought, smiling from ear to ear, my student loan refund was here. "Four hundred and fifty dollars a semester—that surely will take me a long way," I contemplated.

I was wrong. Two weeks later, I sat on my bed reminding my mom to send me my weekly allowance. Here's how I got there: Upon depositing my refund, I immediately walked over to the bookstore to buy two books my professor had added to our list. I did a mental calculation of my balance: $315.

Five days later, the items I had ordered online from my favorite store arrived, leaving me with a balance of approximately $200. Numerous food and random outings during the course of those two weeks eventually brought my bank account back to that dreaded zone: a balance of zero.

Sadly, I was just as unwise with my spending in the second semester, not for once stopping to realize that this was money I would have to pay back—with interest.

I am 18 years old and currently owe $9,000 in student loans. I am only a sophomore. Upon graduation, I am projected to have approximately $18,000 in federal loans, which may seem "fortunate" (and frankly quite reasonable for a student attending Gettysburg College), seeing that the average student graduates with a debt load of more than $25,000.

But the situation still is very unsettling and rather scary, especially for a young college student fully responsible for funding her college education. My experiences this past year stand as an example of what not to do with my refund check when I start sophomore year this fall.

[See 10 colleges whose new grads are most in debt.]

Maria Saab, our legal intern, is entering her third year at George Mason University School of Law and writes about considering student debt and minimizing her borrowing:

During my senior year of high school, I remember deciding which school to attend: public versus private. I knew even before I started college that I would pursue a graduate degree program, and to be able to afford that, it made the most sense for me to attend a lower-cost, in-state, public university. I didn't borrow until my junior year, which left me with minimal loan damage.

That was until law school. I decided to play it safe again, by attending an in-state, public university where I could live with my parents and manage to work a part-time job. As I enter my third and final year, I estimate my educational tab, combining undergrad and law school, will run somewhere around $100,000. That could buy a house! (And is pretty expensive considering I have actively pursued my education on the cheap side.)

The way I have taken out loans has been a product of both want and need. I need the money to finance my education as I am a full-time student. But I have also wanted to be as independent from my parents as possible; I'm 24 years old and just like my peers, I want to make my own way.

I borrow what I need, factoring in tuition, books, transportation expenses, and a little bit for "living." But I don't count on loan money as my only means; I have worked throughout both college and law school. Luckily, I have managed to put aside a little bit of money to support myself when I begin to study for the bar next summer and to get a small cushion in case the job market doesn't accept me with open arms.

In the world of financing your education, it's hard to sometimes avoid accumulating large amounts of debt—especially when you are chasing a dream and on a steady path. The keys are to be pragmatic, only take out what you need, and remember what lies ahead.

The Student Loan Ranger hopes these students' insights are useful as you make some big decisions. To help demystify the borrowing process, the Department of Education has launched a new site: (remember the protections of federal loans).

To learn about student debt relief, download our manual, register for one of our free webinars, and follow us on Twitter (#studentdebthelp) and Facebook.