Need to pay off your loans?
Central Michigan University alumna April Neal wants to buy a big, bad, roaring motorcycle.
But she decided to wait six years before she rides one, and instead reduce her college debt.
"I am not buying one until I make a big dent in my loan payment," said the New York resident who graduated in 2007.
Neal plans to pay off her loans, and said her major financial roadblocks are everyday living and making ends meet with this current economy, while paying for two households with a family.
While some graduates will stress over paying off their student loans, some alumni can offer insight on how to pay them off.
"If you ask any parent, children are an expense, but it's (one) that good parents cannot be cheap with," she said.
To ease the costs of living, Neal takes her kids out to free activities and her family eats out just once a week.
Developing a plan to pay off loans can seem strenuous, but funds must be available to pay down the debt, said Colbin Wright, assistant professor of finance.
"The key to paying off debt early is to consistently produce discretionary income. You must earn more after tax money than you spend. The only effective way I know to spend less than you make is to create and religiously adhere to a budget."
Christopher Dunne graduated from CMU in 1992, and currently works for the U.S. Army.
The Kentucky resident was a full-time student at CMU three different times over a 12-year period. Dunne paid off his debts while serving in the U.S. Navy, while taking trips back to Mount Pleasant.
"Since I now work for the U.S. Army, my advice would be that people should look at ROTC scholarship opportunities, which are still plentiful," Dunne said. "Or consider Reserve duty in any of our military branches."
According to Kiplinger.com, students should use caution with consolidation, because consolidating student loans combines loans into one payment, and does not provide a lower interest rate.
The Web site also said students can save money throughout college education by getting a job, looking for scholarship or applying for an internship.
While in college, finance and law professor Rose Prasad had a tuition scholarship and took out loans to help pay for expenses such as room and board.
"I paid off my loans while still in college because I transferred to another university, and they all had to be paid off over the next five years," Prasad said.
She advises students to live frugally and promptly pay off the loans after graduation because they can hurt their credit rating if not paid.
Roseville resident Rob Styre graduated from CMU in May 2005, and wishes he would have been more frugal when borrowing loans.
"I'm still paying my loans; I had a lot of debt (and still do)," he said. "When I was unsure of how much money I would need to make it through the school year, I would always borrow extra.
Styre said if he planned better at saving, he would have been $10,000 less in debt.
"I have done a lot of consolidating and have been paying a little extra each month, and should have them paid off in an eight year window rather than a 120 month repayment plan," he said.
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