10 Tips for Being a Smart Student Loan Borrower

 – August 1, 2019
10 Tips for Being a Smart Student Loan Borrower

 — New Jersey Society of CPAs Develops Student Loan Checklist — 

With approximately $1.5 trillion in student loan debt in the United States as of the first quarter of 2019, according to the Federal Reserve Bank of New York, students and their parents need to more carefully understand loan terms and how to combat the rising cost of borrowing. As the New Jersey Society of Certified Public Accountants (NJCPA) looks to inform the public about making sound financial decisions, its Student Loan Task Force developed a borrower checklist.

Keep the following in mind before entering into a loan contract:   

  1. Know what you’re agreeing to, such as loan terms, payment options, interest rates and fees.
  2. Know your credit score and the factors that affect it. Investigate whether to refinance/consolidate with favorable terms.
  3. Take advantage of a co-signor to secure the lowest rate offers possible.
  4. Set a monthly budget and include your student loan payments as a line item.
  5. Know your strengths; find a secondary/tertiary job in the growing “gig” economy.
  6. When considering multiple loan offers, be sure to take into account the value of a fixed rate. While fixed rates may be higher than the comparable variable rate offers, variable rates are subject to change in the future.
  7. Choose a lender with no prepayment penalties and take advantage of it — an extra $100 a month can save thousands of dollars in interest.
  8. Borrow as little as possible to get through your education.
  9. Research, research, research! Depending on the type and size of loan, job, lender and state of residency, there may be tax strategies and/or loan forgiveness programs of which to take advantage.
  10. Be thrifty now to live the debt-free life later.

“The rising cost of student loan debt in the U.S. is huge problem for not only young professionals but parents and guardians as well. Knowing what to look for in a loan before agreeing to terms can help students and their families reduce the amount of debt needed to pay for higher education,” said Melissa Dardani, CPA, a senior with EisnerAmper LLP and member of the NJCPA Student Loan Task Force.  

“Student loan debt is a leading reason why so many individuals are struggling financially,” added task force member Zachary Cohen, CPA, a senior auditor at Prudential Inc. “More education is needed about borrowing so households do not suffer and enter into the wrong kinds of debt.”

According to an NJCPA poll conducted in June, more than 80 percent of 623 CPAs surveyed said they either “strongly agreed” or “somewhat agreed” that student loan debt in the United States is a financial crisis. More than 75 percent of respondents considered student loan debt in New Jersey to be a “major problem.”

Learn more at njcpa.org/studentloandebt.


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The New Jersey Society of Certified Public Accountants (NJCPA), with more than 14,500 members, represents the interests of the accounting profession and advances the financial well-being of the people of New Jersey. The NJCPA plays a leadership role in supporting the profession by providing members with educational resources, access to shared knowledge and a continuing effort to create and expand professional opportunities. Visit njcpa.org.