(a) What advice might Maria give Teresa about managing her student loan debt?
(b) If next year Teresa were to consolidate her loans into one loan at 6 percent interest, what advice might Maria give regarding Teresa’s overall debt limit using both the debt payments-to-disposable income method and the continuous-debt method?

Victor and Maria have always enjoyed a close relationship with Maria’s niece Teresa, who graduated from college with a pharmacy degree. Teresa recently asked Maria for some assistance with her finances now that her education debts are coming due. She owes $19,000 in student loans and earns $44,000 per year in disposable income. Teresa would like to take on additional debt to furnish her apartment and buy a better car.

  • CreatedNovember 26, 2014
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