Zero Debt for College Grads: From Student Loans to Financial Freedom

by Lynnette Khalfani

As the cost of a college education continues to increase at a rate of about 9% annually—nearly three times the rate of inflation—more and more college students are taking out loans to cover tuition, fees, and other expenses. Median undergraduate student loan debt is currently close to $20,000, and graduate students end up with an additional $32,000 in debt upon graduation. Pile on thousands more in credit card debt, and many college students today graduate with massive financial burdens that they are not prepared to handle.   In Zero Debt for College Grads , noted personal finance expert Lynnette Khalfani provides a thorough roadmap for stress-free living that will allow recent graduates to focus on their burgeoning careers while navigating the ups and downs of their financial responsibilities.    ""Zero Debt for College Grads,"" by Lynnette Khalfani, puts into plain English what many recent college graduates need to hear: lay off the credit cards and expenses and be a bit more realistic with your lifestyle. --The New York Post

Genres: Nonfiction, Finance

240 pages, Paperback

First published May 1, 2007

Reviews

[Leah Tocco · Rating 4 out of 5]

Good suggestions to find extra money and understanding different loans and what can be done. I was looking at medical loan debt specifically. Only a few pages on that.

[Devin · Rating 4 out of 5]

Sallie Mae is the nation's largest holder of student loans. They permit 18 categories to secure deferment.

There is no statute of limitations on educational loans.

Your budget must include a saving component

You can opt out of getting a refund check. Fill out a form called a W-4. You should also get IRS Publication 919, which walks you through through the whole process of properly filling out a W-4.

To get a list of all your federal student loans, go to the National Student Loan Data System at www.nslds.ed.gov . Supply your social security number, set up a username and pin. Or you can the Department of Education. (p.57)

Differences between student loans servicer, lender, and guaranty agency. Servicer is the one who mails regular billings and computes interest. Lender is the one who owns the promissory note and who legally to be paid. The guaranty agency guarantees repayment on the loan even you fail to pay it. (p.64)

There are tax breaks on student loans (p.86)
Private loans don't offer deferment (p.89)

Loan Consolidation- your original debts are paid off and roll the combined balances from your previous loans into one new, larger loan with a fixed interest rate. The main benefits are that it's easier to make one payment to a single lender. You can lower your payments significantly by stretching out your repayment period. There are no fees, credit checks, or prepayment penalties.
Danger is you cannot undue consolidation and may lose forgiveness, deferment, forbearance, grace-period, etc.
To apply for a FFEL consolidation or direct loan consolidation by contacting a bank, lender, or credit union. The process takes about 6-8 weeks and your first payment will be due 45 days after consolidation is finished (93-100)

Deferment-suspension of your loan payments
Forbearance- temporary modification of your loan repayment schedule, resulting in student loan payments being suspended or reduced; made at the lenders discretion. (p.104)
If you continue your education,by taking, for example, classes in a graduate program, you'll have in-school status, which is one way to defer your student loan payments. (p.105)

Forbearance and deferment are not options once you have defaulted on a loan.(p.127)

The American Federation of Teachers maintains a list of other loan forgiveness programs for teachers. (p.146)

Try to get your FICO score in between 760-850 (p.184)

[steph · Rating 3 out of 5]

So this book was written in 2007. I feel like that need to be stated because some of the things she talks about are no longer current or accurate in this book. I nearly cried when she said that private college tuition in 2006 was like 25K or something. LET'S NOT EVEN TALK ABOUT HOW MUCH IT IS NOW.

Anyways this book had some good points. It first talked about Personal Finance 101 which included the importance of staying on a budget and to save on everyday necessities and don't buy a expensive car or house yadda yadda yadda. Important stuff but it is also stuff that most finance books talk about.

The second part was paying off Student Loans. It gave some good advice about repayment plans and different options available. It talked about defaulted loans and how to clean them up. It gave a little help but not more than I can find online. Also, again since this was written in 2007 it was not current. That said she spent a chapter on explaining repayment assistance programs one can get (such as for teachers or government employees or Peace Corps etc) that would pay off your loans for you. She even talked about working for the government because they will often pay off a certain amount every year. That left me feeling a bit weird. I took out these loans knowing I am expected to pay them back, I don't want to count on my job doing that for me.

The last section was about credit cards and establishing good credit. It wasn't too bad but I have to disagree on her saying don't close credit card accounts because it falls off your credit history right away. No, it does not. A closed credit card shows on your report for ten years and it is counted in with all your other cards and loans and mortgages. I feel like if a person isn't using their credit card or has too many, then go ahead and close it. It's not going to hurt your credit score because it stays on your report for ten years which helps especially if it was closed with a good payment history.

So yeah, this finance book was helpful but only if you know where to look. It just helped encourage me to get back on a budget, which is good. Oh, and it told me that I can call my credit card company and ask for my APR to be lowered. I did not know customer's can do that so I think I will try that in a bit and see what happens. What's the worst that can happen, the customer service reps say no? Eh.

[Julia · Rating 3 out of 5]

An informative book for anyone with student loans. However, I really didn't like that one of her strategies was basically to make other people pay them off for you with their taxes. You made the decision to go to school and chose your major, so don't depend on other people to pay off money you spent!

[Talia · Rating 2 out of 5]

If I was in high school and applying for college this book MAY have been helpful. But as someone that graduated from law school and had already racked up the debt this book was useless. It really is just a bunch of suggestions topped with some bragging sessions about the author. I wouldn't waste my time or money. If you want to read it call me, I will pay you to take my copy.

[Sara Goldenberg · Rating 3 out of 5]

I wanted to read a different book that she wrote, but got this instead. I flipped it open, just to see her style, and read:

"Student loans aren't free money".

Ohhhhhh ..... ya think?

[yole · Rating 4 out of 5]

very informative