There’s more than one way to tackle student debt

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VANCOUVER (NEWS1130) – The ‘higher’ part of education is the cost for many post secondary students.

A recent survey from Bank of Montreal found the average student in Canada will graduate with at least $26,000 in debt and it will take them at least six-and-a-half years to pay it off.

“That’s a long time to have that amount of debt hanging over your head,” says Ashleigh Patterson, Senior Finance Editor at Yahoo! Canada.

“The first piece of advice I would give is to know where all your loans are coming from. Do you have federal loans, provincial loans, a student line of credit from a bank, another form of loan from a credit union? You really need to sit down and figure out your overall balance and what loan you’re paying the most on, either because it has the highest balance or because you owe more in terms of interest rates,” Patterson explains.

“You need to strategize and figure out where you’re paying the most and then I recommend you attack that loan first. That will free up a lot more and you will be able to roll those payments into your next loan and really get the debt repayment cycle going.”

She suggests most graduates don’t need to see a financial advisor.

“I really don’t think so. If you’re shaky and don’t know the basic terms then it might be best to seek professional help but I think, as a student, you’re going to learn so much more if you sit down and really attack the debt repayment process as an individual.”

Patterson feels it’s a matter of basic money management.

“For the everyday student, if you know what you signed up for and you know how much you have in your loan, it’s really a good idea to sit down and immerse yourself in that process. No one knows your budget more than you do, no one knows how much you have coming in and going out, so it’s really important to know how your debt plays a role in your overall budget. I really think you’re never going to have that kind of learning experience unless you do it yourself.”

She feels dealing with student debts aggressively, becoming debt-free earlier, keeps graduates from being overwhelmed by money issues that might otherwise dog them into their later life.

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