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Q: I am a second year student at Florida A&M and I have $10,000 in student loans. Should I try to pay them now on a low-payment process or wait it out until graduation and consolidate them?
— T. Rollem, Via the Internet
A: Your student loans will not be due until you graduate, so consolidation will be an option you should consider at that time. But don’t consolidate just to have one loan payment. Since interest rates are on the rise, make sure the new loan you accept lowers the total amount of principal and interest you would pay if you remained with your original loans.
In the meantime, since you still have two years left, look for scholarships that will help you lower the amount of student loan debt you will have after graduation. A list of more than 100 minority scholarships is available at www.blackexcel.org/100minority.htm.
You should also begin investing any small sums of money you have been thinking about paying toward those student loans into a 529 plan for yourself. You can invest regular sums in an index fund or growth mutual funds that will grow tax-free until you use the money for qualified educational purposes, including tuition and expenses for graduate school. You can open an account with most major banks and brokerage houses. By investing now, you can develop a disciplined approach to investing that will help you reach your financial goals faster.