Financing College without Debilitating Debt


By Melanie Williams
Mark Stalpinski is a free man—of student loan debt that is.
After five years of diligently paying his $24,000 loan debt, Stalpinski, 29, is one of the few who has been able to cut all financial ties to Sallie Mae and the Federal Perkins Loan Program. After receiving his Bachelors of Science in Management Information Systems from UCONN, he has secured a job in his field and paycheck by paycheck paid his debt.
With over $1 trillion dollars of U.S. student loan debt, according to the Consumer Finance Protection Bureau, millions of Americans are hoping to be like Stalpinski. So, what’s the secret? It’s simple. Managing loan debt needs to be handled before, during, and after your college career.
The Hispanic Scholarship Fund, an organization working to address the barriers that keep many Latinos from earning a college degree, has a free DVD for Latino parents that teaches them about the types of colleges and the financial aid available to them. Available either in English (Your Words Today or in Spanish (Tus Palabras de Hoy, the DVD is free – click on the titles of which you want – and packed with information. It includes introductions by Target and Univision anchor Maria Elena Salinas, and inspirational novelas about parents and students who have made their college dreams a reality.
Here is some practical advice for Latino parents getting their children prepared for college, including how to pay for it, and debts to take on. Most importantly, the list starts with what to do if you have a student going to college this month – and you haven’t explored all avenues for student aid.
Last minute deadline. If you missed the deadline for applying for student aid, there may still be hope to be provided with assistance. At this point you must act immediately. The first step is to make sure your Free Application for Federal Student Aid (or FAFSA) is completed. While state grant money is distributed to those who apply earlier, there may be a chance there is still grant money available. Also, be sure to contact your financial aid office immediately and speak to an advisor about your situation; they can walk you through the process and be a critical
Be prepared. While many are overwhelmed with excitement when receiving their acceptance letter; they become easily intimidated when reviewing the financial aid package. Do your research. Compare the tuition rates of all the colleges and ask questions to the financial aid office.
There are several online tools and resources available to you to assist with financial aid advice and guidelines. This preliminary step is an extremely significant part of the process as it will determine which school is financially wise for you to attend.
Know your loans.  Mark Kantrowitz, of and, suggests “before you turn to private loans, turn to federal loans.” Private loans, through banks and lenders, can have higher interest rates, a tremendous late payment, and less-flexible repayment plans.
Federal loans, which are through the U.S. government, usually have lower interest rates and offer several repayment options through longer periods of time. All recipients of the federal loans must complete the FAFSA. This detailed and important financial application should be handled immediately when applying to universities to determine the financial aid assistance needed for the prospective student.
Think ahead. Kantrowitz is quoted on his website,, advising “a good rule of thumb is that your total education debt for your entire college education should be less than your expected salary after you graduate.” Many students are guilty of over borrowing loans.
While you may not be able to pay all of your college expenses out of pocket, loans are not always the immediate answer. Look to scholarships and grants to fulfill some of your tuition needs and determine which school is going to provide you with the education you need, at the cost you can afford, to land the job you need to pay your loans.
Budget. Budgeting does not come after you walk across the stage with your degree and thousands of dollars of debt. Students should budget while attending college. A part-time job can allow you to work on your savings to pay on your loans while in school, or can go straight towards college cost such as buying books.
Pay your interest right away. It’s important to pay your interest rates while attending college. Normally loans do not have a pre-payment penalty, and these small payments can make a big difference in the end.
Photo © Longislandwins via Flickr