Yet in a tough job market, that "good" debt can become insurmountable. "We have students now who are coming out with an average of $21,000 in debt, which is higher than any other generation has faced," she says. "They're coming out with $3,000 to $4,000 in credit card debt as well. That's a very big burden."

How can you prevent student loans from amounting to a lifetime of debt? Chatzky says to always choose federal loans over private loans. "A lot of people make that mistake," she says. Nearly two-thirds of undergraduate students who borrowed private student loans did so before exhausting all their safer, more affordable federal loan options, according to a 2007–2008 report from the Project on Student Debt.

It's easy to become overwhelmed when debt reaches the double digits, so Chatzky says it's essential to figure out what your monthly payment will be. Ask yourself: "Will you be able, having that much debt, to get an apartment? Will you be able to make your car payments? Will you be able to have an adult life?"

If monthly payments will be tough to make, think carefully about the cost of your chosen school and take less expensive options into consideration.


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