The App Rap: Borrowing for College & Student Loan Calculator
empowering women, families, and youth-at-risk through improved literacy, increased positive media, and tools for living.
By Eric Pawlakos
Borrowing for College Developer: USA Funds Price: Free For: iphone, itouch, ipad
Student Loan Calculator Developer: Business Compass Price: Free For: Androids
Many teens are faced with the prospect of taking out loans for college. In fact, student loans this year are going to surpass 1 trillion dollars! There are apps that make it easier to understand finance, especially when it comes to thinking about debt.
Two of my favorite apps can help you decide how much that college education is going to cost you, and can you pay it back?
The first app is Borrowing for College and works for the ipone, itouch and ipad. The interesting aspect of this app is it requires the student to think about what annual salary they expect to make upon graduation from college. This app calculates in 3 easy steps: First, you input what you guess your stating salary would be for your future career. Next, you estimate what percentage of your paycheck can be used toward paying off the loan. Last, you add what the interest rate is and the length of the loan. If you assume you will make a 50k salary and will use 10% of your salary to pay the loan, at a 6.8% (standard student loan interest rate), for ten years (usual required timeline for student loan), your monthly payment would be 416.00. Therefore, it is recommended you do not exceed taking out a loan of more than 5k annually.
A second and equally helpful app shows the true cost of the loan. This app is called the Sudent Loan Calculator by Business Compass. This is an android only app.
This app also needs only 3 pieces of information and will make you think twice about taking out loans. The app requires input of the term, loan balance, and interest rate. For a student who takes out a loan at the standard 10 year, 6,8% rate for 60K the monthly payment ends up at close to 700.00 per month. Over the lifetime of the loan a total of 85k will be required to complete repayment.
Currently, 27.5% of University of California students graduate with 20 to over 30 thousand dollars of debt.*
Eric Pawlakos is a senior at Miramonte High School, a rugby player, and on-air reporter for the teen radio show, Express Yourself!™
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