I am considering taking on a federal Stafford loan in order to go to nursing school at a private school. Tuition is $25,000-30,000. I am single, in my 40’s work full time.
Should I pay the loan off ASAP, before acquiring any further debt? I want to get a house soon and don’t know if this loan will adversely affect me?
Debt is debt.
Student loans deserve respect and should not be assumed to be “good” debt. This new student loan debt is just another obligation that you will be responsible for paying off. In fact of all debts, student loans are among the toughest since they can’t be discharged in bankruptcy and if you fail to pay the loan you can get his will a penalty of as much as 40% of the original loan amount.
It would be wise to significantly pay down the debt before going further into debt and if it was possible to eliminate the debt completely, that would be even better.
The loan could impact your ability to borrow since it will be an outstanding obligation and based on your income, it could reduce the amount you would be eligible to borrow. Before you get house shopping fever, go and discuss your situation with a mortgage broker so you’ll know exactly what you’ll qualify for.
If you don’t have a down payment on the house then it would be smart to focus on putting money in a savings account at the same time as you repay your student loan.
Good luck with nursing school.