My cousin just finished her first semester at a major law school in Washington, DC Before our Christmas dinner, she commented, “You know, I’ll have $ 200,000 in student debt by the time I’m done with my JD.”
And she is not alone.
According to a 2005 survey by The College Board titled “Trends in Student Aid,” 66.4 percent of college students incurred significant debt before graduation. Until Feb. The 2006 article in USA Today stated that the average amount of debt a student will incur has increased by 50 percent over the past 10 years.
So what can an average undergraduate or graduate student do to avoid accumulating excessive and unwanted debt during the educational process? Several things:
Spend the least amount possible on education
The first step in reducing the costs of college debt is spending as little as possible during school. With jokes like “College is the best four years of your life” almost ubiquitous in modern America, it can be easy to justify unnecessary spending as “part of the fun.” However, when student loan payments and credit card bills leak after graduation, suddenly spending a lot of money doesn’t seem so much fun anymore.
If you are applying for loans, consider whether a public or private school will best suit your needs. Public schools tend to cost less, and the education you receive is likely to be as good as the one you receive at a reputable elite university. However, private schools often offer more generous aid packages (although the application criteria can be quite competitive). Before choosing a loan package, estimate how much you will need to borrow and consider the interest rates on the loans. Visit http://www.finaid.org, the official website of The Smart Student Guide to Financial Aid, for more details. The site includes useful calculators to facilitate financial planning.
If you were an academic superstar, or if you’ve had a unique path leading to your college education, consider applying for scholarships. Public and private schools both award scholarships for academics, sports, and writing skills. Lesser-known scholarships are also awarded to individuals who are members of particular religious or ethnic groups, or to those who have had personal or life experiences that build character. Fastweb.com offers information on scholarships of all kinds. Sign up for an account on this website and explore your scholarship options.
Reduce your living expenses
During school, consider giving up the dorms. Room and board costs can include a significant portion of college expenses, and there are often cheaper options. Living at home is one, but only if you attend a school in or near your hometown. Students who forgo rent and bills entirely can save a lot of money during college. Renting a cheap off-campus apartment with a few friends is another good bet (one you’ll have to give up if you attend a school that doesn’t allow off-campus living) and you can work even if you attend college off-campus. the area you grew up in Visit CraigsList.org or your school’s student affairs office to find roommates in your college town.
If your parents can’t help you pay your tuition bills, you may want to consider supplementing your loan funds with part-time work. Most colleges sponsor work-study programs, offering low-stress jobs for students who meet certain income and savings requirements. These jobs are typically enjoyable, allow you to meet more people at your school, and generally pay higher salaries than traditional student jobs. Your campus employment center can help you find a work-study or traditional student job that suits your needs and complements your school schedule. Or, you can work off campus – in restaurants, bars, retail stores, and phone bank gigs, all of which are great net income for students. Consider working full time during the summer, if it fits into your schedule. A summer job is a great way to save valuable extra dollars that you can use during the semester.
Finally, avoid credit cards, if possible. Credit cards are not “free money.” You are buying something with credit now and will pay the price of your purchase, plus more money, later. Many students have short or no credit history, so they are much more likely to be charged higher interest rates on credit card purchases. And, many students have trouble meeting credit card payments each month, in addition to their other expenses. The consequences can be devastating: Students can rack up huge late fees, and late payments will negatively affect their credit scores, making future major purchases like homes and cars difficult to insure with low interest rates. .
College is one of the most exciting new chapters of your life. And, with careful planning, you can make it one of your financially smartest times, too.