What’s scary about being a college student?

I was a college student for Halloween this year.

And not just any student—my former college roommate and I actually went to a costume party this year dressed as ourselves as freshmen, circa 1989.

“Why?” You may ask. Is there something particularly scary about a college student from the late ’80s?

Big hair = scary Caroline costume

Frankly, I think the picture speaks for itself.

And really, poodle-perm wigs and gigantic earrings aside, being a college student IS kinda scary. The unknown is often scary, and in college so much about your future is a question mark—especially when it comes to finances. You probably don’t know where you’ll work, how much money you’ll make, what your expenses will be, or how much debt you’ll be in when you get out. It can be pretty unnerving.

But there is a way to start getting a handle on it. A few quick calculations can help you figure out if you’re taking on a manageable amount of debt. The experts recommend that your monthly loan payments should be no more than 10% of your net monthly income.

So what will your monthly student loan payments be? Time to do some math. Here’s a calculator to help you figure out what your monthly payments will be on your Federal Stafford Loans Click here to learn about third-party website links. And if you have private student loans, use this calculator to help you get an idea what those payments will be.

Now that you have an idea of what you might owe per month, does it match up with your salary expectations?

If you haven’t already begun researching starting salaries in your field, your academic adviser might be able to help, or check out this salary calculator Click here to learn about third-party website links. Once you’ve got a ballpark idea of your starting salary, subtract about 20% for taxes (I know—ouch!), and you’ll have a rough estimate of your net annual income.

Don’t panic if it looks like your loan payments are going to be higher than 10% of your monthly income. When it comes to repaying federal loans, there are many options available to help you manage your payments. However, it might be time to keep an eye on your spending—borrow only what you really need in student loans, and try not to run up your credit card balance Click here to learn about third-party website links.

Now that you know what your student loan payments might be vs. your earning power, does your college debt seem manageable? Or too scary to think about?

Caroline Hanson

About Caroline Hanson

Caroline is a communications consultant for Wells Fargo Education Financial Services. Although she has been known to forget her own ZIP code, she has memorized the lyrics to every bad 1970s pop song ever written. Unfortunately, she also loves karaoke. Caroline spends her spare time at Target®. She also likes biking slowly and has participated in RAGBRAI. Caroline is a graduate of Iowa State University and has worked in journalism and public relations for the past 14 years. She lives in Iowa with her husband and has a 19-year-old stepdaughter and 2-year-old son.
This entry was posted in Financial education, Paying, Post-college, Preparing, Student loans, Wells Fargo Bank. Bookmark the permalink.
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