A soon to be college student heads off for school. Thinking more about the present than the future he finances more than his education. He uses student loans to fund his lifestyle and his learning. Upon graduation he feels crushed by the amount of debt hanging over his head. And he can’t even imagine the day when all of his loans will be paid off.
Fortunately for you going to college doesn’t have to be like this.
Yes, you’ll be offered far more student loans than you need. But do you have to take them? No.
If you’re ready to further your education but aren’t willing to bury yourself in a mountain of debt here are ways you can minimize the amount of student loans that you need.
Start with the Basics
The basics are always a good place to start right? You might know that doing the following is important but I think we should take some time to rehash these points.
Federal Student Aid – Federal financial aid is provided in the form of grants. It’s extremely important that you apply for financial aid before doing anything else. You can see what type of aid you qualify for by filling out a FAFSA application.
Scholarships – Scholarships are awarded by companies, schools, and individuals. When you earn a scholarship you don’t have to pay the money back. There are thousands of scholarships you can apply for, each awarding college students money based on different merits. Apply to as many scholarships as you can. They can make a huge difference in the amount of money you need to take out in loans.
Budgets – You also need a budget. Calculate how much money you need for things such as housing, transportation, food, books, clothing, and entertainment. Look for creative ideas to minimize the amount of money you spend. Creating and sticking to a budget will ensure that you don’t overspend during your college years.
Choose Your University Wisely
Choosing the right school is no easy feat. But how much will the college you choose impact your future career?
It really depends.
University choice can be highly debatable. In certain areas and fields it’s really not going to matter what university you went to. Other people argue that in today’s economy, where it’s tough for recent grads to get decent jobs, going to a top university will put you a step ahead of your competition.
Think about what your ideal career looks like. Where do you want to work? Where did those employees go to school?
Where I live it really doesn’t matter what college you went to. What matters more is what connections you have and who you know.
If you’re in a situation like this then opting for a less expensive university is the way to go.
Work Part Time
Reading the horror stories of college grads who are sinking financially because of the debt load they took on should be inspiration to keep your finances in order while getting an education.
College is a time to have fun but it’s also a time to grow up.
Working while you’re in school will help you cover your basic expenses and hopefully help you to save money or begin paying down your loans.
You have several options when it comes to working. You can get an internship that will benefit you professionally after graduating. Participate in a work study program or work part time jobs in the food or retail industries.
In addition you can also start your own side business to bring in an income.
Know Which Loans You’re Taking Out
When you’ve covered the basics – taken out grants, applied for scholarships, found a part time job, and are living on a budget – and can’t cover the cost of school you’ll have to look into student loans.
This is where it becomes even more important to educate yourself on your options.
You can take out private loans or federal loans. Subsidized and unsubsidized loans.
You should first take advantage of any federal loans that you qualify for. These will come with lower interest, better terms, and a potentially longer payback period than private loans.
(You can read more about student loans in The Definitive Guide to Student Loans.)
Minimizing the amount of student debt you need to take out isn’t easy but it can be done.
You’ll have to work hard, make sacrifices, and make smart choices that will benefit your career and finances in the future.
What steps did you take to minimize your student debt?