Everyone is aware that student loan debt has become a massive problem here in America. Even though I am not yet in college I am astounded by the enormous debt that some people have when they graduate. The Consumer Financial Protection Bureau reported on March 21, 2012 that “Our initial findings on the size of the private student loan market are sobering. When we add in the outstanding debt in the federal student loan program, it appears that outstanding student loan debt hit the trillion dollar mark several months ago – much larger than estimates from other recent reports.”
A trillion dollars? Ugh. I may need to go breathe into a paper bag for a minute. With college only a few years off for me, I am committed to graduating from college without any debt at all. I know that this will be difficult, but am convinced that it is not impossible after doing a little research and thinking things through. Here are five strategies to avoid student loan debt:
1) Start Saving Your Money Right Now
If you are a teenager, saving your money now will make a difference for you when you get started in college. Even if you only saved $25 a month from the time that you turned fifteen, you would have $1,200.00 by your nineteenth birthday. It isn’t that much, but it is certainly better than nothing. If you saved $100 a month you would have $4,800. Not bad…
2) Work Summers, School Breaks and During School
If you are really diligent you can save over $2,000 in a typical summer (assuming you live at home and are working a minimum wage job). You can continue to earn throughout the school year so that you have money for living expenses. Just recently I discovered students can take out loans for living expenses – and some are having themselves a time buying expensive clothes, going out to dinner at fancy restaurants and other such foolishness. Whaaaaaa?!? Of course, when they graduate and don’t find a job that pays $100,000 a year like they thought life isn’t going to be quite so much fun. Especially when they discover that they can’t buy their first home because their student loan payment is higher than the average monthly mortgage payment…
3) Apply for Scholarships
You already know this so I’m just gonna say that although it is a pain in the neck to fill out all of those applications it doesn’t hurt to try and can make a big difference for you financially. The sooner you start, the better.
4) Go to Community College
You can save a ton of money by attending your local Community College for the first two years. And your savings becomes much more significant if you do this AND continue to live at home. This is what I am planning to do. Getting a cute apartment with some girlfriends sounds really awesome, but paying off student loan debt for the rest of my life just doesn’t appeal, know what I mean?
5) Attend a School Committed to Helping its Students Graduate Debt Free
Recently, I heard about Davidson College which is located north of Charlotte, North Carolina. Their Board has done something extraordinary by creating The Davidson Trust. This small school has made it possible for students from all economic backgrounds to graduate without any debt. Other schools have also followed Davidson’s example so be sure to carefully research schools that you thought might be too expensive for you to even consider.
These are some of the strategies that I will use when it’s my turn to start college life. It is so exciting to think that if I work hard and plan carefully I can look forward to college without the ‘gift’ of student loan debt. It is certainly a gift that ‘keeps on giving’ and I want nothing to do with it…
How do you plan to avoid student loan debt?