On average, the lifetime earnings of a college graduate will be $1,000,000 MORE (that’s one million dollars!!) than a person who has a high school diploma. Therefore, taking out a loan to get a college education is a wise thing to do, if you plan wisely.

While you don’t have to pay a student loan while you are in school, you commit to start paying the loan immediately after graduation. If you drop out of the college or university you are attending, you have to start paying the loan off immediately. Either way, you pay back  the loan on a monthly basis – with interest – until the full amount borrowed and the interest the loan accumulated is completely paid off.

You cannot NOT pay.

If your financial situation becomes compromised to such a degree that you can’t pay back the entire amount of the loan, you can seek Student Loan Forgiveness, but only after 10 or 20 years of making payments. That means you have to pay the majority of the debt before the rest of the loan can be ‘forgiven’. If that percentage payment isn’t high enough, more interest will be tacked on to your debt and over time, those costs will mount up. Eventually, the IRS (Internal Revenue Service) will contact your employer and have your employer increase the amount of money the government withholds (taxes) from your paycheck until the loan is paid off.

The rules that govern default (non-payment) of a student loan are complex and can change over time. If you don’t pay, you won’t be arrested, but you could be penalized with bad credit scores – and that will influence whether you can buy a car or a house, rent an apartment, or even get a credit card.

Understand that no one is ‘out to get you’ regarding your student loan payments, but a contract is a contract. You sign a contract when you take out a loan and promise to pay it back. Wherever you get the loan, whether through a bank or a government agency, you are using someone else’s money. If you get a loan from a government agency, you are borrowing taxpayer dollars. If you get your loan from a bank, you are using bank customer/investor money. All those people are lending you the money so you can get an education, but they want it back so the next generation of borrowers can benefit as you did.

You can have about half your loan officially forgiven (and feel good about yourself) after ten years of payment if you have a full-time job working for the government (federal, state, local, or tribal), an eligible not-for-profit organization, for AmeriCorps, or the Peace Corps.

But since you cannot guarantee that you will get a job in any of these organizations, it may be best not to take a loan that is too large for you to pay back, thus slowing your life progression. There is a formula that will help you ensure you get a loan that is affordable for you:

The amount of a student loan should not exceed the total amount anticipated as earnings in the first year of full-time employment after college graduation.

That means that if you want to be a teacher, and as a first-year teacher you can expect to earn $45,000, then your total student loan amount should be no more than $45,000. Monthly payments will be a few hundred dollars, a very affordable amount if you are earning $45,000. That doesn’t mean that you have to pay the loan back in the first year – you can decide to pay over a long period of time or a shorter period of time (10 or 20 years). It is the equivalent of a home mortgage for your education.

As a Rainmakers Candidate, you will have an opportunity to learn about careers, potential income, and then calculate what your ideal student loan will be. Rainmakers learn how to use data to make this, and all their important decisions.


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