Student loans are a very helpful resource for acquiring a college education, or an advanced degree. Student loans enable people, who otherwise wouldn't be able to, to acquire valuable knowledge and skills and use their natural talents to the best of their abilities. This almost always means they're able to get a better job than they could without a college degree. That's why, overall, college graduates earn so much more than high school graduates over their lifetimes. Without student loans, millions of people would lead very different lives, and have a much lower standard of living.

But student loans are debts. Long term debts. It's easy to put that fact out of your mind when you're going to classes, hanging out with your friends, and just enjoying your college years without a financial care in the world. But four years goes by fast, and once you graduate, you'll start repaying those debts in a few short months. And you don't want to get to that point and suddenly realize for the first time just what you're looking at. If you haven't paid much attention to your student loan totals, you can definitely be hit with a bad case of sticker shock.

Some recent college graduates say they wish they hadn't borrowed as much money as they did. In surveys, a minority of graduates with loans say they can't get a job in the career field they hoped to pursue because it doesn't pay enough to cover their living expenses once loan repayment is factored in. Others say they've taken a job that pays more over one that they like better, in order to pay off their loans. Some even report having to work two jobs in order to pay off student loans.

These situations are certainly unfortunate, but they are also certainly not the norm. The majority of college graduates with student loans don't have these problems. And there's no reason you should, either. Careful planning is always called for when borrowing large sums of money, and student loans are no different. Another very important factor to take into consideration is that student loans cannot be discharged through bankruptcy. Once you owe them, you owe them, and there's no getting out of paying. Defaulting on a student loan will ruin a person's credit for a long, long time. But, again, with careful planning, that should never be a problem for you.

Always know how much you're borrowing every year, and the terms-interest rates, how long is the deferment period after graduation, how long it will take to pay off the loan, etc. And do this every year-you should always know the cumulative total of your student loans. You should also be asking yourself hard questions, and being honest with yourself. Be realistic when considering how much money you will make in an entry level position in your desired field. Will it be enough to enable you to make your loan payments? If not, then you've got some thinking to do. Should I change majors? Should I go to school half time, get a part time job, and not borrow the money? And again, be realistic. If you're getting a liberal arts degree, and have no desire to go to law or other graduate school, can you really afford having $40,000 in student loans? What jobs will enable someone with a degree in English or Economics to handle that much in student loan debt? Frankly, not very many. If you've really set your heart on something like working with inner city children, or writing the Great American Novel, or seeing the world for a few years after college, you'd best think twice before taking out another loan. And even if you're majoring in business, or engineering, or other well paying majors, you should never, ever borrow more money than you really need, just because you can.

Plan wisely, borrow only what you need, and always know how much you owe, and have a realistic plan for repaying it. Follow these rules, and you'll get the most out of student loans, and you'll have no regrets. That's all there is to it.

One handy and easy to use planning tool is a student loan repayment calculator. You input the amount of your loan and the interest rate, and it'll tell you in a few seconds how much your monthly payment will be. There are many on the internet; just do a search for "student loan calculator".

Note:  Students with federal loans, whether Perkins or Stafford, have a six month grace period from the point that they withdraw, graduate or otherwise drop below half-time enrollment. At that point, their payments of principal and interest would begin.  In fact, it may actually be legislated out of existence in the next few months. The rules for repayment of Stafford loans also apply to PLUS loans.

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