Student loan debt is an epidemic in this country right now. According to the US Department of Education, the median student loan debt has risen from $12,110 in 1990 to $31,941 in 2015. That's a 163.8% increase. That is ridiculous. The crazy thing is that since that's the median, there are a lot of people that have more debt than that.

What are students supposed to do?

If you're already a college graduate, you should try to pay off your student loan balance as soon as possible. Figure out which repayment option works best for you and get to work.

If you are a college student, and you take out student loans, there are some things you can do to minimize your student loan debt.

Figure out what you owe

Some college students don't take the time to figure out what they exactly owe for tuition and fees each term. I've seen students that only have a $500 balance take out the full amount of loans that they can get per grade level. That can be a dangerous cycle if that is done each school year. Loan amounts add up quickly. It doesn't have to be that way. By knowing what you owe, you can accept the exact amount each year.

Pay your remaining balance

Depending on the amount that you owe on your tuition balance, you or your parents may be able to pay the remaining balance. I know that a lot of college students are broke, so for them this it's not a valid option. Depending on the situation and the amount of their balance, they may be able to get their parents to help them out.

If you're not able to pay your remaining balance yourself, your other option is to take out a student loan. There are two loan options to choose from.

Federal Loans

Most students are awarded federal loans. The two loans that they can accept are the Direct Subsidized Loan and the Unsubsidized Loan. The interest rates for both of those loans are 3.76% for the 2016 -2017 school year. Interest is charged on both loans while you're in school, The Department of Education pays the interest on the Direct Subsidized Loan, while you're in school at least halftime and for the first six months after you graduate school. The Dept. of Ed. does not pay the interest on the direct unsub loan. You are responsible for those fees. If you choose not to pay the interest (most students don't) the interest will accrue and be added to the principal amount of your loan. There two more types of federal loans.

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If you are a graduate student, you can apply for the Direct Unsubsidized Loan. The interest rate for that one is 5.31% for the 16/17 school year. The other loan is called the PLUS loan. That loan is for parents who wish to take out a loan to help their kid out, or it can be for graduate students. The lifetime loan limit for undergrads is $57,500. They can have no more than $23,000 of that amount in subsidized loans. For graduate students, the amount is $138,500.

Private Loans

The second type of loans that students can choose from is private student loans. People should pay close attention when they are choosing a private lender. They should look at the interest rate and any fees that the loans may have. Make sure that you research more than one lender as well. The interest rate tends to fluctuate across the board with private loans. Your interest rate may be even higher if you are taking out a student loan without a cosigner. In my opinion, private loans should be your last resort. If you have any subsidized or unsubsidized loans available, use them first. If you have to take out a private loan, banks or credit unions should be the first places that you can look. You can also check out online lenders too.

I recently paid off one of my private loans. While I was happy to pay it off, I wish I would not have taken it out in the first place. I still have other loans that I'm currently paying on. The amounts are getting lower, but I do wonder how things would be if my mindset were different ten years ago. I can’t change the past, but I can educate the students of today.

Used right, student loans can help their students get their degrees with minimal debt. If you use them wrong, you will be in the predicament that a lot of college grads are in today. When choosing to accept student loans, make sure that pick the amounts wisely. Make a plan to start paying on them once you graduate. The interest is not a game. It will have you doing a double-take when you check your student loan bill.

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