Asistel in English
Graduating from college with a student loan is very common unless parents are in a position to pay for their children’s education.
But unlike a car loan or credit card debt, student loans buy something that increases in value. While a car depreciates over time, a college degree pays dividends through better jobs and higher salaries.
Also, interest rates on student loans are low, ranging from 5 to 7 percent. And the loans are designed to keep payments after graduation reasonable.
To give you an example, suppose Maria is a typical student. She takes a $5,000 student loan every year for her four years of college. She would graduate with a total debt of $20,000.
If she earns the average salary for a University of California graduate, her monthly income after taxes will be about $3000. With that salary, she can easily pay the $234 a month on her student loan.
Payment on student loans usually begins six months after graduation. And students are eligible for payments based on their salaries, not to exceed 15 percent of their disposable income. If graduates are unemployed, they can defer payment.
A college education is the best investment. It’s an investment in your future.
A message from the University of California Cooperative Extension.