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Should You Walk Away From Your Student Loans?
It’s not surprising that you didn’t realize what you were getting into with your student loan. You were just barely out of your teen years when you signed the paperwork. If you’re like most people, you probably had little understanding of what it means to incur debt and were lulled into a false sense of security with the knowledge that payments will be deferred for years to come. The language can throw you too. What’s the difference between a subsidized and an unsubsidized loan? What about federal vs private loans?, and so on. This lack of understanding can make you the victim of predatory interest rates from private student loan providers. But walking away from your student loan isn’t the same thing as walking away from your home loans. You’d better be aware of the consequences before you decide not to pay.
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The Rising Costs of Student Loans
In the past ten years, debt levels for college graduates have more than doubled. One of the main factors contributing to this rise is the decrease in public money available for colleges. As state and local budgets tighten in the wake of the financial crisis, colleges and universities often lose a portion of their funding, and this shortfall is passed on to students, who with their parents must bridge the gap with larger and larger loans.
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60-Second Guide to College Savings Strategies
You may have heard that Mint.com has gone into partnership with The Motley Fool to provide you outstanding personal finance information and advice. On the topic of getting out of debt, we at Mint have shared our perspective on getting out of debt, based on these three personal finance principles: spend less than [...]
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