If you browse out to the financial sections of Reddit or other sites where people get together to share their experiences and opinions, you are sure to find plenty of young people venting their frustrations about not being able to save any money because they have mountains of student loan debt to repay. Short of offering solid advice like prioritizing debt and cutting unnecessary expenses, there is not a lot that even the most advanced financial advisor can do to help these folks pay off their debts any faster. However, we can help those of you who are thinking about starting college soon. Whether you are fresh out of high school, leaving the military to pursue an education or even an older person going to university, there are some things you can do to help you avoid excessive educational debt so you can save more of your hard earned (or your parents’ hard earned) money.
Right out of the gate, the smart plan is to never borrow a dollar more than you need to in order to get your education. You are never sure of what life holds for you down the road, so you want to have as little debt related to your educational needs as possible. That being said, however, it is possible that you’ll still need to use student loans in order to get your degree. Use these tips to help you out along the way.
Be Aware of ALL your costs
You should ask if tuition is locked in for the duration of your 4 years pursuing a degree. You should also dig in and do some research to see if you qualify for any scholarships. Also, if you plan on using financial aid, ask if your plan will cover a single year or all 4 years. Some colleges try to get more students in the door by offering loads of front-loaded grants and aid during the first year, and then those incentives are done away with the following year. And don’t forget, your tuition, class fees, text books and room & board are not the only costs to consider. You should also research the cost of living, transportation and entertainment on campus at the school you plan to attend. People often leave these important expenses out of their initial budget, and then wonder why they are even more broke as a student than they thought they’d be.
Try to pay off Student Loans in 10 years
Don’t take a loan out for any more than you absolutely need. Let’s say that you are getting a student loan for tuition that covers your needs at about $6,500, but you decide to make the loan for a little more, say $7,000. That extra $500 might give you some fun money, but it is money that you’ll have to pay back – with interest – in the future. Even such a seemingly small amount, like $500, can complicate your life after you graduate, and it is money you don’t necessarily need, so skip on taking loans for more than the essentials. That is money that you can save in the future, instead of spending – and tacking on interest – right now. Make it your goal to draft a payment plan that will have all of your student loan debts completely paid off within 10 years. That way you don’t have to spend the rest of your post-graduation life always regretting the loan option you choose when you first started.
By doing a little research and not borrowing more than you absolutely need to, you can start to save more money after you graduate, instead of using all of your income on the new job to pay off loans that you took out years ago. This will help you to avoid having to go online to vent about how much your student loans are making life difficult for you after your college years are far behind you.