×

What I Would Have Told Myself in College: Barbara Thomas

September 18, 2019

 

Barbara Thomas, Executive Vice President of Education Loan Finance (ELFI) provides some financial advice to college students based on her own experiences in college.

 

Hello, I’m Barbara Thomas. For most, like me, my college days were a great experience that led to incredible personal growth. I had a marvelous sense of freedom and made many new friends. However, I have spent much time reflecting on what I would do differently if I could begin my college life all over again, given what I know now. Hindsight is a wonderful thing, isn’t it? So here’s my advice to all of you who are preparing to enter college, or are currently in your freshman or sophomore years.

Choose an Affordable College

When looking for the right college, don’t get beguiled by a famous name and a beautiful campus. And, while a state-of-the-art fitness center or an Olympic-size swimming pool might be important if you’re an athlete, most of the time you will be paying for them in higher college fees. Instead, make sure to keep your eyes on finances, as affordability should be a top concern. Considering the fact that many students end up taking on sizeable student loan debt, keep in mind that you (most likely) won’t be living on that beautiful campus in your late 20s or 30s.

Rethink Your Path to the Best Education.

Just because a college is more expensive, doesn’t necessarily mean that it’s better than one that costs less. You should look upon college as an investment in your future. Consider what the return on investment (ROI) from your college education will look like. In other words, analyze which college is likely to provide you with the most bang for your buck. Here’s a report from U.S. News & World Report that gives you the ROI of different colleges.

Look at Alternatives to a Four-Year College.

If you find out that college is not the best path for you, it can turn out to be an expensive mistake. Keep in mind that dropping out of college won’t make your student loans disappear. So before you enroll in a college, consider these alternatives:

  • Take a gap year to earn money to put toward going to college and give yourself more time to decide what you want to do.
  • Consider attending a trade school to learn a valuable skill with high earnings potential.
  • Spend two years at a community college. Attending a community college can help you save on tuition. However, if you plan to transfer to a college of your choice, be sure to do some checking. Find out how many transfer students are accepted and how many of your community college credits can be used.

Do your research and crunch the numbers to make sure you’re making the best choice.

Earn More While in School

A survey of millennials found that earning money while in college was the number one thing that participants wished they had done (or done more of). This reflects the increasing financial cost that goes along with obtaining a college degree. The College Board estimated that in 2017 (updated figures are available), the average student loan debt upon graduation was $28,500. Keep in mind that a heavy debt load is going to affect your financial future – your ability to buy a home, start a family, and save for retirement. Apart from financial considerations, there is no better way to acquire real job skills than to hold down a job and learn about its demands firsthand. Employers know this, which is why previous work experience is the most popular measure to assess job candidates, even those straight out of college.

Research Ways To Lower Your Monthly Student Loan Payments

So, you’ve done everything right – you chose the higher education path that was right for you, and you have landed an interesting job. Now, what about those student loan payments? Are they weighing you down and preventing you from leading the life that you had envisioned after college? ELFI has a solution to your problem – it’s called refinancing. You can close out your original loan and take out a new one with a lower interest rate and/or a longer term. This can significantly lower your monthly loan payments. Get in touch with us to see how we can help you!

 

Learn More About Student Loan Refinancing With ELFI

 

Terms and conditions apply. Subject to credit approval.

Leave a Reply

Your email address will not be published. Required fields are marked *

Female medical student standing next to professor
2019-10-17
Medical School Debt: Why Now May Be the Time for You to Refinance Student Loans

The road to becoming a doctor is a long and expensive one. After 4 to 5 years of undergraduate studies, 4 years of medical school, and 3 to 7 years of residency, many graduates are well into their 30’s before they earn a doctor’s income. Residency does come with a paycheck, but the average Resident Physician makes $58,803 a year, according to glassdoor.com. It's hard to imagine much of that is applied to medical school debt.   Americans owe a total of $1.6 trillion in federal and private student loans and newly-minted doctors carry a good portion of those loans, carrying an average of $179,000 in medical school debt, six times more than the average graduate.   Student loans can be a financial and emotional burden, even for doctors, and consolidating and refinancing those loans can be a relief on both fronts. With consolidation, you can roll multiple loans into one, leaving you with a single monthly payment. This simplifies repayment. Refinancing means agreeing to new and different terms of your loan with the goal of getting a better interest rate or term. Better rates and terms can make medical school debt more manageable.  

Why Now is the Time to Refinance

Monthly principal and interest payments on student loans can bury many borrowers. A lower interest rate can help you save thousands of dollars over the life of your loans. Better rates also mean you can pay down that medical school debt faster, also helping you pay less in the long run.   The importance of refinancing now is that you can start saving immediately. Depending on what you qualify for through private lenders like ELFI1, you could lower your interest rate, have a single monthly payment, lock in a fixed interest rate, and more. All helping you to enjoy the fruits of your hard work faster.   Another reason to refinance now is that the Federal Reserve Board lowered interest rates twice already this year. This federal interest rate applies to banks—it’s the amount of interest they charge each other to lend federal reserve funds. The benefit for you, as a borrower, is that the less interest banks pay, the less you can potentially pay.  

Refinancing Federal vs Private Loans

In our blogs, we regularly discuss the difference between private student loans and government student loans. Keep in mind, the differences between these loans come back into play for refinancing.   Regardless of your initial loan type, when you refinance your medical school debt, you take out a new loan with a private lender – ideally at a meaningfully lower interest rate. With this new private loan, you can lose access to federal benefits like:
  • Income-driven repayment plans
  • Ability to pause payments through deferment and forbearance programs
  • Loan forgiveness programs
  ELFI has a team of Personal Loan Advisors who can help you decide if refinancing makes sense for your situation. As always, we encourage borrowers to look for student loan refinancing loan options with no origination fees or application fees first.  

Downfalls to Refinancing Medical School Debt

Other than losing out on federal borrower benefits, refinancing your loans might not make sense right now. If you already have a low-interest loan, you might not see much savings. To see what you can save, use ELFI’s savings estimator tool.   Additionally, some banks charge fees that could potentially offset any interest savings. With ELFI, you’ll never pay:
  • Application fees
  • Origination fees
  • Prepayment penalties
  Finally, if you’re still in your residency or fellowship, it might make sense to wait until you have a higher income or better credit score, both of which will impact the interest rates available to you. Or you might considering having a cosigner to help you achieve an even lower rate.  

Other Options to Payoff Medical School Debt

While refinancing can lower your monthly payments and get you a better interest rate, there are other options for lowering your medical school debt.   Consider overpaying your monthly amount. This option isn’t realistic for all borrowers, but if you’re savvy enough to live simply or lucky enough to apply a spouse’s paycheck, you can quickly pay down that medical school debt. Some graduates might even have the option of taking out a zero-interest (or ultra low-interest) loan from relatives or friends. Once the student loan is repaid, you can put the excess funds toward other debts or investments.  

Understanding Your Loan Refinance Options

It is important to explore all your options when opening an initial student loan. It's equally as important to explore the best refinancing options for reducing your medical school debt. If you need help navigating those options, contact ELFI. As pioneers in the space, our management team has over 30 years of expertise in student loans and student loan refinancing.     1Subject to credit approval. Terms and conditions apply.   Note: Links to other websites are provided as a convenience only. A link does not imply SouthEast Bank’s sponsorship or approval of any other site. SouthEast Bank does not control the content of these sites.
Adult students walking in collegehall
2019-10-16
Can I Refinance My Student Loans and Go Back to School?

Many Americans, at one time or another, have thought about their student loans as they contemplate whether or not they can afford to go back to school and pursue additional higher education. Maybe you were able to partially pay your way through college, but couldn’t quite close the gap, so you turned to federal student loans or private loans  to make ends meet. You may have been accepted into your first-choice school and you made the financial leap using student loans to fund the degree of your dreams. Whatever the case may be, you’re now in a situation where you need to change your current student loan structure in order to go back to school and take the next step in your education. Student loan refinancing may be the best option to help you lower your monthly payments and allow you to go back to school with financial peace of mind.  

So I Can Refinance My Student Loans and Go Back to School - But Why Should I?

  The short answer to the question “Can I refinance my student loans and go back to school?” is often a “yes”. There are lots of options for dealing with student debt, and those options change depending on the amount of your current student loan debt, whether your current student loan is federal or private, and what you’re looking to achieve through student loan refinancing. This means that no matter what your financial situation, you can almost certainly take advantage of a student loan refinance through a reputable private lenders such as ELFI1 provided you can meet credit criteria established by each lender.   One
advisor stipulates that you should only take out new student loans that won’t overburden your financial situation by taking on too much debt or “overleveraging”. Overleveraging means taking on more debt than your income can comfortably pay for, as measured by financial ratios such as “debt-to-income ratio,” or DTI. If you already owe a lot on your current student loans and have the financial means to afford new student loans, then you might want to consider refinancing the student loans you already have to make room for the new monthly debt payments you will have on the additional student loans you take out. That’s good news for graduates who shelled out a pretty penny for their undergraduate degree.   In general, the best reasons to refinance your student loans - if you’re taking on new debt to go back to school - would be to:
  • Get a lower interest rate (and potentially lower monthly payments)
  • To take advantage of new federal or private loan programs that may be financially suitable to you, or
  • To consolidate the student loans you already have with a single, private lender rather than dealing with multiple lenders on your existing student loans.
 

Is a Student Loan Refinancing My Best Option? 

  Student loan refinancing does have some benefits that other options, such as debt consolidation programs, would not (like allowing you to release a cosigner from your previous loans). One big benefit you’ll likely receive from student loan refinancing is a lower monthly payment. The federal student loan debt consolidation program, unlike student loan refinancing with private lenders, averages the interest rates of your existing federal loans and rounds up the weighted average interest rate by an eighth of a point, so while the interest rates of some of your loans may go down, others will go up to meet the average set in the consolidation process. That means that your interest costs likely won’t change all that much, if at all.   There are many reasons to explore refinancing your student loans, including improving your interest rate, payment timeline, or ability to take on new loans with the money you could save each month. Other benefits include releasing a cosigner from one or more loans, getting better customer service or benefits than you currently get from your lender, or having the convenience of making a single monthly payment instead of multiple payments. Consider using an industry-leading private lender such as ELFI for a fast loan prequalification experience (in as little 2 minutes!) that can get you the student loan funding you need.  

What Factors Should I Consider When Deciding on a Student Loan Refinance?

  A few of the factors most graduates need to consider when refinancing their student loans have to do with not only payment size, interest rates and terms, but also the type of loan they will refinance into and their own personal financial situation. Keep in mind how this may improve your ability to get better terms or rates on your current loan or on any new student loans you end up pursuing after your refinance in order to go back to school.   For example, many graduates considering a student loan refinance in order to go back to school don’t know that there is no federal student loan refinancing program. Both private and federal student loans can be refinanced with a private lender, but neither federal nor private loans can be refinanced into new federal loans. What you started with is what you get when it comes to your federal student loan - unless you refinance with a private lender.  Federal student loan rates are set by the US congress and mandated by law - you can’t get a better deal or any rate concessions the way you might be able to do with a private lender.   Another big factor when it comes to deciding on a student loan refinance is your personal financial situation. While this is often the first question that graduates looking at a student loan refinance ask themselves, it should be asked again - can you afford new student loans to go back to school, even if you get the refinancing terms and rates you want for your current student loans?

How Do I Choose the Right Time to Refinance My Student Loans?

  Some financial experts and financial bloggers, such as NerdWallet, suggest refinancing the minute you have the credit score and income to support getting a lower interest rate, regardless of whether you want to go back to school and take on new loans in the process.   Beyond this, and the obvious timing issues presented by deciding on whether, or when, to go back to school, be aware that your income, credit score and debt situation will have an overall impact on whether you can get the student loan refinance terms you want. Making sure to weigh all your options and pick a reliable lender who can help walk you through all your loan options. ELFI’s personal Loan Advisors are trained to help you navigate this process and to simplify it for you.  

How Do I Choose the Right Student Loan Refinancing Option?

  While there are many reputable student loan refinance providers available, expert and impartial voices like NerdWallet and Student Loan Sherpa agree that ELFI (Education Loan Finance)  is one of the best. With multiple loan options, flexible repayment structures, and best-in-class customer service, ELFI can make your dreams of refinancing your student loans and going back to school a reality. ELFI also goes a step beyond and provides each borrower a personal loan advisor to help them navigate the process.    

Final Thoughts

  No matter what your degree field or career aspirations, most graduates will be faced with the choice of whether to refinance their student loans, when to do it, and how to do it in a way that fits their lifestyle. Using a reputable student loan refinance company like ELFI can help you pick the best student loan refinancing option for you, especially if you intend to take out new loans and go back to school. Check ELFI out today for the best and latest in student loan refinance options and get on the road to the career of your dreams!   1Subject to credit approval. Terms and conditions apply.   Note: Links to other websites are provided as a convenience only. A link does not imply SouthEast Bank’s sponsorship or approval of any other site. SouthEast Bank does not control the content of these sites.
Woman holding a smartphone
2019-10-15
Best Apps for Budgeting in College

Managing money is hard, but budgeting in college? That’s a whole different ballgame. For a lot of students, you have so much to worry about with classes, work, and other involvements that finances often slip your mind. So how do you hold yourself to a budget when you can barely remember to feed yourself dinner? Luckily, we live in an age full of apps to help you get a jumpstart on budgeting and money management. Here are a few of our favorites.   Mint®. Mint is a free mobile app where you can view all of your banking accounts in the same place. It automatically updates and puts your transactions into categories so you can see where all your money is going - and where it’s coming from. It also recommends changes to your budget that could help you save money. Its features include a bill payment tracker, a budget tracker, alerts, budget categorization, investments, and security features.   PocketGuard®. Like Mint, PocketGuard allows you to link your credit cards, checking, and savings accounts, investments and loans to view them all in one place. It automatically updates and categorizes your transactions so you can see real-time changes. PocketGuard also has an “In My Pocket” feature that shows you how much spending money you have remaining after you’ve paid bills and set some funds aside. You can set your financial goals, and this clever app will even create a budget for you.   Wally®. This personal finance app is available for the iPhone, with a Wally+ version available for Android users. Like other apps on this list, it allows you to manage all of your accounts in one place and learn from your spending habits. You can plan and budget your finances by looking at your patterns, upcoming payments and expenses, and make lists for your expected spending.   MoneyStrands®. Once again, with this app, you’ll have access to all the accounts you connect. Its features allow you to analyze your expenses and cash flow, become a part of a community, track and plan for spending, create budgets and savings goals, and know what you can spend without going over budget.   Albert®. A unique feature that Albert emphasizes is its alert system. When you’re at risk for overspending, the app will send you an alert. The app also sends you real-time alerts when bills are due. Enjoy a smart savings feature, guided investing, and the overall ability to visualize your money’s flow and create a personalized budget.   Before you download any budgeting app, make sure you check out the reviews and ensure it’s legitimate. Because a lot of apps ask for your personal financial information, it’s essential you verify their legitimacy before entering your account number. Listen to what other people have to say and then choose the option that works best for you, because not every app will be perfect for everyone. Budgeting in college may be hard, but downloading an app is just one way you can make it easier. Maybe you don’t want to use an app at all. If you’re in that boat, you can check out some other approaches to budgeting here or here.   Note: Links to other websites are provided as a convenience only. A link does not imply SouthEast Bank’s sponsorship or approval of any other site. SouthEast Bank does not control the content of these sites.