Keep an eye on loan debt

Many of us rely on student loans to pay for our education. Some of us even depend on them to provide for living expenses as we pursue our education.

According to a recent article on NPR's website, student loan debt is climbing toward $1 trillion, and it's taking us longer and longer to pay off our loans.

Two-thirds of students graduate with debt totaling an average of $24,000, according to NPR. The real problem with this debt, however, is that many students borrow far more than this, leaving them with a crippling debt that hinders their future aspirations.

Stephanie Iachini of Altoona, Pa., was the first in her family to go to college and financed it herself. Between her undergraduate degree and law school, both of which were pursued at private institutions, she racked up a debt total of about $160,000, according to NPR.

Graduating with this level of debt can place enormous pressure on a person. A person with this level of debt will no doubt need to find a high-paying job quickly that will enable them to pay that debt back in a timely fashion. The sheer weight of this type of debt can affect where a person decides to live, as well as potential future travel plans.

Mark Kantrowitz, publisher of fastweb.com and FinAid.org, leading websites about paying for college, said student loan debt tends to linger over students for a very long time.

"About a third of bachelor degree recipients this year have enough debt to have a 20-year or longer repayment plan," Kantrowitz said.

We all need to be aware of the consequences of the student loans we take out. Students need to make themselves aware of how much debt they will owe after graduation, as well as the expected salary that their degree will allow them to obtain.

Iachini said she had no idea what her monthly payment would be after graduation. It is $1,200, according to NPR. Iachini also ended up choosing nonprofit work over legal work; this payment consumes more than half of her take-home pay.

She said all of her financial decisions are based upon the salary of her husband, which include decisions like buying a house or having children.

It is also critically important to know the difference between what kind of debt you are accruing as a student. According to PBS, loans are typically divided into two categories: federal loans and private loans. Federal loans are capped, and interest rates are fixed anywhere from 3.4 to 7.9 percent depending on the type of loan, according to PBS.

Private loans are the riskiest choice a person can make because there is no set limit on the amount of private loans one can take out or on the interest rates that banks can charge for them.

Despite that fact, the amount of students making this choice continues to rise. According to the Project on Student Debt, 14 percent of undergraduates took out private loans in the 2007-2008 academic year, up from just 5 percent four years before that.

Student loans are an important means for those who need them to obtain an education. Students taking on debt must weigh the decision to take on this debt very carefully.

They will need to look at their chosen career fields and look at the salaries they will be making relative to their loan debt. Students will also need to acclimate themselves with repayment options such as income-based repayment. Being aware of what a student loan means will be important to the future of all students.