Debt. It is a scary word and one that often haunts many college students once they graduate and begin to move on with their lives. Before you panic, there are ways that you can avoid having debt or too much debt after graduation. Below, we will go over some of these ways and hope that you can make use of the tips to keep yourself out of debt.
Choose Your School Wisely
One mistake that many students make is they are eager to go to the best and top name colleges and they end up spending more money on tuition than they initially planned to. Instead of going to a top school and spending $75,000 for a degree, you can go to a different college, typically a community or local college, and spend $30,000 for the same degree.
If you do not have your heart set on a specific school, then you may want to consider all of your options. There is nothing wrong with going to a community college for the first two years and then switching over to a university. Weigh your options and choose what is best for yourself.
Pre-Pay or Pay Interest While in School
If you have not entered into college just yet, it may help to start allocating some money to your tuition and pre-pay for your college. There are many good pre-paid plans that will allow you and your parents to save money for your education.
Another great option is for those who are already in college and have an existing loan. You should pay the interest on your student loans while in school. The interest amount is only going to be a handle of bucks and it will save you thousands over the course of your student repayment period.
Budget for Your Bills and Expenses
When it comes time to graduate from college, you need to have a budget in place to help you properly plan and pay for all of your bills and expenses. You may need to cut some of the luxury or unnecessary items that you currently splurge on, but it will be worth it in the end.
When the time comes to make your budget, you should think about all of the bills you have including your student loan repayment amount. Sit down and find out what items you NEED and which ones would be nice. You should budget for the necessities and obligations FIRST then you can slowly add other items into your budget.
Borrow Wisely and Not Excessively
It may be tempting for students to borrow the entire loan amount that they are offered, but this is not a wise strategy and should not be practiced. To help you avoid debt after you graduate, you should make sure that you are ONLY borrowing the amount of money you need to pay for your tuition, books, and educational expenses. Therefore, if you are offered $12,500 to borrow, but schooling will only cost you $4,500, then you should only take out the $4,500 and NOT the entire amount.
The less you take out now, the less you have to pay back later on. In fact, when it comes time to calculate your interest payments and monthly payments, you will pay much less if you borrow less.
Consider Work Opportunities on Campus
You may be able to find a job on campus that will help you pay for your education in exchange for working a few hours per day on campus. These additional funds can be used for your tuition and will cut down on the amount of money you need to borrow.
If you are interested in any work opportunities, you will need to speak with your student advisor to learn more about the availability of work and how the program works.
It can be hard to avoid debt after graduation, especially if you took out any student loans. The average student owes about $30,000 – $35,000 in loan debt once they graduate. The tips above can help you avoid as much debt as possible. Once you graduate, spend time focusing on paying off the debt you have and you will soon be able to live debt free after graduation.