A newspaper article on four women with student debt concludes with really bad advice.
Student loan tips:
Take out student loans only after you’ve exhausted efforts to get grants and scholarships.
The correct advice: never take out a student loan.
If you need loans, take out federal ones before private ones, said Janice Riutta, director of student financial aid for Gateway Technical College.Federal loans are easier to defer and come with more loan forgiveness and repayment options, Riutta said, adding students should also choose subsidized federal loans over unsubsidized ones because interest kicks in later.
The correct advice: never take out a student loan.
If you must take out a private loan, be careful, Riutta warned.
The correct advice: never take out a student loan.
“The private alternative loans are a big market and it’s a competitive market and it’s not always very easy for the student to navigate,” she said. “One company may have up-front benefits while one may have back-end benefits.”
The correct advice: never take out a student loan.
No matter what, don’t default.
The correct advice: you can’t default without a decision by a judge that yours is a hardship case.
If he lets you default, you will owe the IRS a large tax bill. The loan is considered taxable income when it is revoked by a judge. If you live in a state with an income tax, you will owe the state, too.
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Published on July 27, 2012. The original is here.
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