The following post is from Melissa Batai
After the high school graduation season, many students are making plans for their futures, which may include attending college. Preparing to go to college can be overwhelming. Not only do students have to decide which college to attend, but they have to start thinking about a major and, most importantly, how to afford college. For many, attending college means taking out student loans.
While the media has done a great job reflecting on the problem of student loan debt, there is still a lot of misinformation out there. My husband and I made a lot of mistakes when choosing a college and taking out student loans, especially because we were each the first in our families to go to college, and neither of us had much guidance.
This would be our advice to high school grads getting ready to attend college:
The college’s name and reputation matter. People like to tell students that it doesn’t really matter what college you choose, but in my experience, it does. Say you attend a small private school that is only known locally. If you stay local for the rest of your life, what college you attended likely won’t matter. However, if you’re applying to graduate school or a job in another part of the country, your college won’t carry much weight. If you instead attend a prestigious, nationally recognized school with a good reputation, your degree carries more weight because it has name recognition value.
The bigger the school, the deeper the pockets. As someone who is quite shy, I understand the desire to attend a small school. However, the bigger, more prestigious schools have a rich alumni base (and by rich, I mean vast AND with deep pockets). These alumni often donate heavily to their alma mater, which means there is more money available for financial aid. Sometimes attending the bigger school makes more sense financially, even if it’s not the best fit for you.
Don’t automatically consolidate your loans when you graduate. When I graduated, everyone told me the best thing to do was consolidate my loans. On one hand, that was the best thing to do because it lowered my overall payment, and I just made one payment a month instead of several smaller payments. But no one told me that the student loan interest rates can fluctuate and that I should wait to consolidate until the loan rate drops. I ended up locking myself into a 6.75% interest rate because once you consolidate, you can’t change the interest rate when it drops lower.
Read the fine print in your loans before deciding on consolidation. This is another mistake I made by blindly following the advice to consolidate my loans as soon as I graduated. One of my loans was a private loan through the college I attended, and it had a 2% interest rate! When I consolidated, I rolled that loan in with my other loans and started paying 6.75% interest. I’m still, years later, kicking myself over that one.
My husband and I now have a child in middle school who will be in college before we know it. We’re glad we have this advice to give him based on our own experience, but we know there is still a lot to learn.
What advice would you give a new high school graduate about choosing, attending, and paying for college?