Our college years can be some of the best years of our lives, and of course we all know the educational benefits, but many of us do not think about the long term financial effects. That future bill left to be paid can be extremely alarming. According to Consumer Reports, the average debt outstanding for 2011 graduates is almost $23,000; however, we’ve all heard horror stories about people who have accrued well over $100,000 of debt by the time they’ve graduated. This is a scary amount of money. In another perspective, the next time any of us will borrow that kind of money will likely be to buy a house, which can take 30 years to repay.
As a soon-to-be graduate, one of my personal goals for college was to graduate debt-free, which I'm happy to say I am about to accomplish. Following through with this goal has put me in a better position for future financial success. Here are some tips to help avoid or minimize debt:
Look for Scholarships and Grants
Many students never attempt to apply for grant or scholarship money because they believe that they will never be chosen. Never assume that you do not fit the correct criteria or demographic to obtain a grant or scholarship. Apply to any opportunities available.
Work Through School
Working while attending school is not the most popular idea, but it will dramatically help in the long run. Working will help pay for those expenses that you would otherwise be dependent on loans to pay. Some complain they are too busy, but it's possible to find a job that is compatible with your school schedule. Many colleges offer job opportunities that have flexible hours and are on campus.
Pick a School Close to Home
Remaining at home after high school is not always the most enjoyable choice, but it will help minimize your future debt. Consider attending an undergraduate and/or graduate program that is close by so you can continue living at home. If living on your own is the only option, look for off campus living arrangements further away from school, where cheaper rent can be readily available.
Do Not Be Afraid to Go to Community College
I, like many other students, did not know what I wanted to study in college, so I transferred to a less expensive school. I completed all of my general requirements and received an Associate’s Degree before I finally transferred to a four year university. Doing this gave me time to decide what degree path I wanted to pursue without running up large amounts of debt.
If You Take Out Loans, Be Smart
Sometimes taking out loans is inevitable. If you do have to take out loans, be sure not to borrow more than you absolutely need. Do not borrow money to buy unnecessary things such as entertainment expenses or new tech toys. Also, try to acquire Federal loans because they are typically less expensive than private loans. A good rule to follow is avoid borrowing more than you reasonably expect to earn in your first full year of working.
To help manage your finances in college, check out our 1st Access Checking account, designed with students in mind.
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