There’s nothing more stressful than thinking about student loans. After putting in all of that work in college, you now have to spend many years dealing with student loans.
This makes you think. Are student loans even worth it in the first place?
Here’s a harsh reality about student loans and how you can deal with it…
A majority of student debt is the direct result of acquiring high amounts of student loans to pay for a college education that will financially not justify the investment.
What does this mean? It means that if you want to work in a field where you won’t be making lots of money, it’s going to be difficult to justify the 50 grand or more in student loans.
According to this article on CNBC many students expect a much higher salary post-graduation than what they actually get:
“LendEdu analyzed a College Pulse survey of 7,000 college students from nearly 1,000 colleges and universities and found that students, on average, expect to earn $60,000 in their first job out of college.”
“PayScale estimates the typical graduate with zero to five years experience makes $48,400. The National Association of Colleges and Employers (NACE) calculates that the preliminary average starting salary for graduates from the class of 2018 is about $50,004.”
There’s a decent different between what we think we will make after college and what we actually earn. I personally thought that I would be rich after college. I didn’t realize that you actually had to struggle to find work and then deal with moving up the ranks.
Why do young people acquire massive amounts of student debts that will follow them for decades to come?
Unrealistic expectations about student loan debt.
I don’t think many of us knew what to expect prior to beginning college. Some of us had unrealistic expectations going into college, while some of us really had no expectations. Either way it’s rare that most young people think about paying back student loans or student loan consolidation prior to entering college.
We all think that we can start an online business and launch the next Facebook or something along those lines.
As a young person it’s easy to be a dreamer. You want to change the world. You want to do interesting things. Suddenly, you realize that life can be pretty expensive and chasing dreams won’t always pay the bills.
Some jobs are very rewarding (i.e. Social Worker or Teacher) but simply don’t earn what is considered a “high income.” These are very well respected jobs in society. Unfortunately, they don’t lend themselves to earning a justifiable income for the high amounts of student debt that may be used to get them.
Lack of information.
When you apply for student loans, you don’t look into the reality of paying back these loans or trying to manage your salary and expenses. What nobody explains to us is how long it will take to pay off these student loans.
This begs the question: is a college education still a decent investment?
At the end of the day I think that it still is. Without dwelling into a debate about the ROI of a college education, I would like to move on to the next topic…
Now that we’ve discussed why student debt is often very high, let’s try to look at how this can be combated.
How can you minimize the amount of student loans you acquire to pay for college?
Take a close look at your college major and the expected salary in the field.
Before you do anything, I want you to ensure that your college major will bring in the type of money that can justify the expenses.
Paid work terms.
A paid internship can do wonders for your student loans situation and how you pay for college. Not only will you get a chance to throw your name out there, but you’ll make some money too. Don’t dismiss the small wage that most work terms offer. Earning money throughout your college career can put you well ahead of your peers.
Work during the summer.
If you have no luck with finding a work term and can’t slip in a part-time job into your school schedule, you can always work during the summer. I’ve heard many young people balk at this idea, but it’s really not that bad. There’s usually not much going on during the week as it is. You might as well use this time to make some money. Sleeping in until 3 and watching Fresh Prince of Bel Air reruns isn’t the best way to spend your summer.
Attend a community college/school close to home.
An option that I’ve discussed in the past when it comes to saving money on college tuition is to attend a community college. A community college education may not be as prestigious as attending a private college.
However, the real question here is: can that community college education land you a similar paying job? For many careers the answer is no. For some careers the answer is yes. It all depends on your situation, what you want to study, and what field you want to work in after college. All I’m saying is that you shouldn’t dismiss the value of a community college education without at least looking into it.
I DO understand that there’s more educational assistance available from private schools. What needs to be taken into account is the cost of moving, rent, and all of the expenses that come with living on your own. You could save thousands of dollars by staying at home to attend college.
Of course, you do miss out on the college experience (drinking on Tuesday nights) but you won’t have to deal with student loans into your 40s.
Please try not to fall victim to this harsh reality of the majority of student debt. I understand that college is likely the most fun time in one’s life. I’ve certainly had my fair share of fun the last few years.
Make sure your student debt doesn’t plague you as you want to move on in life because there are so many parties to attend.