Right after high school, when you are planning on pursuing further education, you are suddenly faced with numerous difficult decisions. A shocking statistic shared by Make Lemonade shows that the number of student loan borrowers has become greater than 44 million and the total loan has amounted to be $1.3 trillion in 2017. Therefore, high school graduates today need to make sure that they are ready to take on a massive amount of debt before going to college. However, there are certain tips that you can use to avoid accumulating a significant amount of debt. You can see some of these tips below:
1. Start Saving
You might feel like you have hit a brick wall when trying to gather money for college. You are advised to start saving as early as possible to avoid running into such a situation. You can do that by taking up a part-time job on weekends or after school, and a full-time job in the summers. However, it is essential for you to save the majority of what you earn rather than spending it all on unnecessary items.
2. Consider Grants
By filling FAFSA (Federal Student Aid) application at your earliest, you can make yourself qualified for receiving grants for which the basis has to be Expected Family Contribution (EFC). However, you will have to show how much you need the grant to become eligible for it. Grants can depend on different factors and you can, therefore, do proper research on all the grants that you are eligible for and apply at the right time.
3. Explore Work-Study Opportunities
Working through college is another way of avoiding the accumulation of student loan debt. Many students opt for part-time work opportunities and use them to minimize the financial burden. Many on-campus job offers are worthy of considering if you want to earn some cash during your time at college. However, because of the study load at the time of college, it is important to choose a job that is not especially demanding.
4. Choose the Right College
The kind of college that you choose will have a direct effect on the debt that you gather. Ivy League colleges might seem to be a glamorous option at first, but if you do not have the means to pay off the debt, it is better to settle for something cheaper. Many experts recommend spending the first two years of your college education at a community college and then transferring to a different school. The costs incurred during your time at the community college will be exceptionally lower. However, it is mandatory to make sure that the college that you hope to transfer your credits to accepts credit from the community college you plan to attend.
5. Spend Wisely
Keeping a tab on how much money you spend otherwise is equally important. Many students make the mistake of using credit cards excessively during this time which only adds to their overall debt. Therefore, one way of keeping your expenditures in control is by limiting the transactions you make with your credit card. Other than that, prefer buying your clothes and shoes from a store that is comparatively cheaper. The highest cost goes out of the pocket when arranging meals. For this, take a look around and identify the cheapest option available. Avoid excessively eating out with your friends and explain to them why it is important for you to save money. Simplify your lifestyle and make a budget at the beginning of the month. If you stick to your budget, you will no longer feel the need to spend on unwanted items.
6. Pay Attention to Who You Are Borrowing From
Federal student loans are regarded as the better option when deciding from which lender to borrow. Even though many private lenders give an excellent view of how they can provide you with the help that you need, choosing them can result in higher interest rates and fewer chances of forgiveness. Federal loans give you the chance to change your payment according to the changes in your income. Moreover, there are also higher chances of forgiveness of debt if you meet certain conditions.
7. Work for college you are going too.
Going to college can be an exciting experience. But considering how expensive education is today, it is important for high school graduates to come up with an effective strategy to finance their college education. By using all the tips mentioned above, you can spend your time at college without having to worry about ending up with a pile of student loan debt to pay off.
If you’re interested in some advice on destroying other debt, check out our complete guide to destroying debt!
Have you been able to avoid student loan debt??
Certified Public Accountant, Masters of Business Administration, Masters of Science in Accounting, Chartered Global Management Accountant, Family Man