It's never too late to save

When junior Andy Goheen graduates in two years, he won't be leaving with just his degree and memories.\nHe'll also have student debt and lots of it. \nThe guitar performance major predicts he'll accumulate up to $80,000 in debt through private and federal Stafford loans by the time he finishes his senior year. \n"That's obviously unmanageable debt," he said. "It's going to be a huge burden." \nAs college costs rise and students borrow more to pay for them, experts say situations like Goheen's are becoming increasingly common. \n"The reality is that each year we're burdening the next set of graduates with more loans than the kids that came before them," said Heather Boushey, a senior economist at the Washington, D.C.-based Economic Center for Policy Research. "They're not graduating into labor markets with wages that are rising that much faster."\nThe nonpartisan think tank published a study last year concluding that the average undergraduate student leaves college $17,600 in debt. That figure puts IU's level of indebtedness above average.\nIn its most recent report, the IU Reporting and Research office shows that, of graduating seniors, 44 percent took out loans at some time in their career, accumulating an average of $21,251 in debt during their time here. \nBut with September's designation as National College Savings Month by the National Association of State Treasurers, student debt management is getting a renewed focus. \n"It's never too early, and it's never too late to save for college," said Martha Holler, a spokeswoman for lending agency Sallie Mae, which processes federal and private loans IU administers. \nHoller said students can control debts by saving as much as possible -- therefore reducing the need to borrow -- and joining programs that give cash rewards on purchases. \nHer other tips: \n-- Go for the free money. Some scholarships might only be worth $500 or less, but they add up quickly, Holler said. \n-- Set up savings in state college savings plans (Indiana's is called the College Choice 529 plan) because they allow individuals to qualify for tax-free investments and withdrawals. \n-- Choose a federal loan. They provide the lowest interest rates and have favorable terms for students, Holler said. Some options include Stafford loans, available to all students regardless of need, which have fixed interest rates at 6.8 percent, and the Parent Loan for Undergraduate Students, which also has a fixed interest rate. Additional interest rate discounts might be available through lenders. \n-- Fill in gaps with private education loans instead of other types of student debt. Holler said many private loans mirror the federal programs and offer more flexibility than credit card loans or those available through banks. \n-- Stop delaying the inevitable. "You just have to pay down your loans," she said. \nDavid Haeberle, a finance professor in the Kelley School of Business, has simpler advice.\n"Don't spend money," he said, as a way of controlling debts. "If you don't have any salaries, there's even that much more reason why you need to budget. Anything you spend, you're going deeper in the hole." \nHe also urged students to throw credit cards in the trash.\nThe majority of students, he said, will only reduce credit with them. \n"They get the credit card for the right reason, but the card ends up hurting them more than it helps them," Haeberle said. \nThe whole issue of student aid isn't just confined to college though. \nBoushey, the economist, said the large amounts of students' debt trickles into other parts of life for affected students. \nAs students attempt to pay off loans, some might be forced to wait on purchasing a home or buying a car to hold down costs. Others might decide not to get married and have a family, she said.\n"These are profoundly important issues for quality of life for what people can afford," she said. "Given the high cost of homes, the high cost of child care, the high cost of health care, young people are looking at a whole basket of cost constraints and high student loans are adding to those"