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Photo: SIphotography/Getty Images/iStockphoto, License: N/A, Created: 2016:11:07 19:43:31

Student loan concept. Young man with stack pile of books and piggy bank full of debt rethinking future career path

Now more than ever, Pennsylvania students are leaving college with higher amounts of debt. A new report by the Project on Student Debt found that after four years in college, students left with an average of $34,798 in debt.

The report looked at colleges and universities all across the state. In 2015, the average debt carried by students from The University of Scranton was $40,640.

Seventy-one percent of college students in Pennsylvania have college debt, ranking the state third in the nation.

There are ways to minimize that debt, but that means talking with the school to navigate the best way to finance a college education. Parents should apply for financial aid as early as Oct. 1 of the year before their child starts attending school, according to Ari Benitez, director of student financial aid, East Stroudsburg University.

After parents apply for any kinds of grants and aid, which Benitez encourages everyone to apply for regardless of income, then comes the loan process.

“The number one option for parents is the PLUS loan,” Benitez said. Parents can apply for the entire cost of an education, including books and gas money. It’s a fixed rate that is currently a little less than 5 percent. It doesn’t look at your income-to-debt ratio, but borrowers must have good credit. “Most schools provide a payment plan option to parents who don’t want to take out a loan if they feel they can handle the balance.”

Benitez said some parents choose to use credit cards to pay the balance, although she said it’s not recommended.

“We’ve had parents that have had to borrow $3,000 a year and that’s a lot for them and we’ve also had parents who borrowed a lot more,” she said. “We’re finding that in our industry, very few parents are ready for college. You shouldn’t be thinking about your child’s college education when they are a senior in high school. If you do and you’re unprepared, it’s going to be a struggle.”

According to the Project on Student Debt, 80 percent of students graduate from ESU with debt, with 25 perent of those students carrying private loan debt.

“The best thing that parents can do is start a 529 plan, that is a long-term savings account for college education and it is generally tax deferred,” said Matthew P. Prosseda, president and CEO of First Keystone Community Bank. “The best advice is to begin saving as soon as you can. It doesn’t matter how much you’re saving, just save something.”

Pennsylvania’s 529 Investment Plan is managed by the Pennsylvania Treasury Department.

Prosseda said some parents may choose to borrow money for education by borrowing against their home equity.

“That can provide a tax advantage for parents,” he said.

Prosseda said parents should consider the value of an education and know when too much is “too much” when it comes to the price of a college education.

“Compare the total cost of the education (tuition, room and board) at different schools and try and determine where the best value is coming from,” he said. “Many state schools are less expensive than private schools and the quality of the education is often very similar. Do your research.”