New Student Loan Program | Video

Julie Leonardi | 1/16/2013

When it comes to paying for college tuition, students and their parents need all the help they can get. But a new program may help students pay back their loans at an affordable price. Pay As You Earn allows students to pay back their college debt over a 20 year period based on how much money they make at their post-grab job.

Minot State University’s Laurie Weber said, "If they`re not making very much money this allows them a way to keep current with their student loan obligation so that it doesn`t affect their credit in a negative way. They`re still in good standing with their loan service, they`re still making some progress towards repaying that debt and it keeps them in good standing even though they`re not making the larger payment that they might have under another plan."

Weber said this new program may interest students because of the lower monthly payments. "So it`s meant to make that payment more manageable for you and it really kind of prevents that total overwhelming of the debt, the burden."

But the longer it takes you to pay, the more interest you`ll rack up. "The downside of that is that over the long haul of the loan you`ll pay more interest and in total end up paying more total dollars back on that same dept obligation."

The most important thing parents should do before they send their kids to college, is to research loan options. "Families, as a whole, need to do some research before they begin pursuing federal student loan options to understand the whole picture, understand what they`re getting into, when they choose these repayment options, to be vigilant about protecting their credit, for the long haul."

And the last thing any student wants to do is ask their folks for more money!

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