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Expert Tips: Managing Student Loan Debt, Paying For College

8:54 AM, May 10, 2013   |    comments
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WFMY -- A new survey from the American Institute of CPAs (AICPA) of student loan borrowers and their parents finds 38.8 million Americans are affected by student loans.

The survey respondents said student loan debt delayed their ability to buy a home, contribute to retirement accounts and get married. In some cases, they had to work additional jobs to help pay off their debt.

WFMY News 2 asked expert CPAs Ernie Almonte and Clare Levison for some tips for new college grads.

Almonte said an education is a powerful investment.

"It increases your job opportunities and your earnings potential. But what we're finding is, the average debt is between $24,000 and $25,000 per person and that puts quite a burden on them," he said.

So what can new graduates do if they're in debt?

Levison said the first thing they need to do is cut they're spending.

"We don't want them to dig the debt hole any deeper by incurring credit card debt or other debt," said Levison. "We want them to cut their spending, so they can pay as much on their student loans as they can, as quickly as they can."

Almonte said families need to start thinking about the cost of college early.

"If parents, when they're having children, starting saving from birth and moving forward, you can open up a 529 account and you can get tax-free earnings from that," said Almonte.

Levison said they encourage kids to put away half of the money they get for birthdays, graduation or other holidays. They can put the money into a savings account that is specific for college.

"By the time they get to graduation, that can really add up. Another thing they can do is search out scholarship options," said Levison.

As for young adults, who are working but still struggling to pay off their student loans, Almonte had some tips for them too.

"When I sit down with my clients, I try to tell them about this survey as well, that 75 percent of the people are making personal and financial sacrifices, whether they're delaying marriage, delaying buying a home or delaying more children," said Almonte. "So we tell them, take a look at your budget. Look at different ways you can cut expenses. Maybe you can take in a roommate to help save costs and apply those savings to paying off this debt."

Almonte said he encourages clients to make their student loan payments on time because it affects their credit rating and it could affect their future employment.

You can find more tips for paying off student loans at 360financialliteracy.org.

WFMY News 2

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