Take care of other debts before paying off your student loans, experts recommend

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Thursday, May 4, 2023
Tips to help pay off your student loans
In the video above, learn tips on how to help pay off your student loans.

HOUSTON, Texas (KTRK) -- Student loans can be daunting when it's time to pay them off after graduation, but it doesn't have to be with good financial planning.

John C. Lopez is a senior professor of practice at Bauer College of Business at the University of Houston and explained how the interest rates on student loans are generally pretty low, which gives students a good opportunity to get ahead on other big expenses.

"Plan on paying the student loan debt over time and take care of other debt that you have, so things like car loans, things like credit card loans," Lopez said.

When applying for student loans, Lopez also suggests students always make sure the loan amount adds up with their career choice.

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"So, as an example, the career earnings of a teacher versus the career earnings of a doctor, those are two different metrics, and so the loan amount really needs to reflect 'How much money am I going to earn and pay this debt back?'" Lopez said.

Lopez adds it's important to not apply for too much money either. It's a common mistake he sees among students. "Maybe the tuition for that particular semester is $7,000, and they'll take out a loan for $10,000. Typically, what I see with students is that (extra) $3,000 in their checking account doesn't really go towards education."

Student loans typically kick in six months after graduation with a 10-year provision. Lastly, students should look into scholarships or grants their university or college offers.

Oftentimes, Lopez says students will opt for a loan first before even looking into other financial aid on campus.

"Students don't apply for them because it's easier to go to the Financial Aid Office and apply for a loan than it is to write an essay, or an application, or do whatever you need to do to apply for a scholarship. So that's a big misconception that student loans should come first," Lopez said.