Student Savings: The Unspoken Lesson
These days, the cost of getting a college degree is higher than ever. This, combined with the fact that many students find themselves entering college without financial support from their parents or guardians and with little to no personal student savings, has left many with no real option but to rack up a significant amount of student loan debt throughout their years in a college or university. In fact, according to a recent CNN article the average amount of college related debt for a 2013 graduate will be $35,200. And while you may have no other choice than to borrow money to invest in your career, it is important to borrow responsibly and explore all financial aid options prior to taking on student loan debt.
Common Mistakes
One of the most common mistakes that students make when acquiring student loan debt is that of borrowing more than they need and living “high on the hog” during college not thinking about the ball and chain this is going to be throughout their financial futures. Many students simply borrow the maximum throughout the course of their college careers simply because they were offered a certain amount from a lender or from the government. While this may not seem like a problem at the time, irresponsible borrowing can lead to difficulty in paying off loans in the future.
How to Save as a Student and Beyond
If you are soon to be entering college or are even a current college student, however, there are some steps that you can follow to ensure that you do not fall into such a difficult financial situation down the road. By keeping the following tips in mind, you can borrow responsibly, get through school, and be able to pay off your debts in a reasonable amount of time down the road.
Keep Expenses to a Minimum
It seems obvious that the less you spend for an education the less you have to borrow but cutting costs and college education don’t seem to go together in most student’s minds. One easy way to drastically reduce college costs is to go to a community college for the first two years. There are many benefits, the first is the savings in room and board if you are able to live at home. Room and board can easily cost $5,000 per semester or $10,000 per year so if you can save that for your first two years you have already saved half of the average loan amount. Secondly, Community College tuition is half or less of what a four year university will charge so as long as you are sure to take courses that will transfer in you can get your first two years of credits at half price. Saving another $10,000 or more. And finally, some top universities like William and Mary actually have a discounted tuition for “continuing education” students thus reducing your tuition even once you transfer into the four year program and the best part is that when you graduate your degree will look exactly the same as someone who paid twice as much. By using this method you could easily save $35,000 and graduate debt free.
Find the Right Loan for You
If you decide to take out loans as a way of helping to pay for school, be sure to explore your options prior to doing so. Speak to the university of your choice as to student loan and finance options.
Enroll in Payment Plans
To minimize the amount of money that you need to borrow, consider looking into your school’s payment plan options as a way of paying for part or all of your tuition without taking out loans. A lot of times, you can enroll in a payment plan for one low fee, and then have the entire semester to pay off what you owe. By picking up a part-time job while going to school, you may be able to avoid taking out loans and be able to pay for your schooling over the course of the semester with no interest instead.
Borrow Only What You Need
Instead of taking out loans to cover your tuition, fees, books, living expenses, and commuting costs, consider only taking out loans to pay for a certain portion of your schooling and use funds from a part-time job or other income to pay for the rest. Many students make the mistake of taking out loans to pay for everything while they are in school so that they do not need to have a job, but this can lead to serious financial hardship down the road because it often results in students borrowing close to double the amount that they actually need.
Consolidate Student Loan Debt
Finally, if you have loans with multiple interest rates and from various lenders when you graduate and it comes time to begin paying them back, consider working with a debt management program. This is a great way to combine your loans and interest rates into one, which typically can save you hundreds or even thousands of dollars down the road. Not to mention, by going through debt consolidation, you can enjoy the peace of mind in having just one due date to worry about each month and can possibly pay off your loans faster as well.
Enjoy a Better Financial Future
By following some or all of the above tips, you can avoid taking on more student loans than you will ultimately be able to handle. From there, you can enjoy a more stable and comfortable financial future upon graduation and even well beyond that.
See Also:
- The Quickest Ways to Pay Off Your Student Loan
- Ways Your Kid Can Help Pay for Their College Education
- Dealing with Student Loan Debt and Bankruptcy
- Skyrocketing College Costs
- The Benefits of Community College
- What to Look for in an Online Degree Program
- Going Back To School? Here Are The Top 5 Online Programs To Pursue
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