It’s not something we want to think of as we go through college, but it is a Damocles’ sword hanging over our heads. Student loan is a necessary evil, money that we must borrow in order to secure a financially sound future. But, if we are unwise about the amount we borrow or irresponsible in repaying it, the liability could come back to bite us where it hurts the most. So, since prevention is better than cure, it’s best to borrow as little as possible so that the amount we must pay back does not skyrocket out of proportion to our earnings. To this end, here’s what you can do:
Look for scholarships. It’s the easiest way to minimize your debt, because it’s money you don’t have to pay back. Even if you’re unsuccessful in securing a scholarship before your first year in college, continue to scour the Internet for opportunities in your senior years. The more free money you get, the less you have to borrow.
Have a plan. When you know exactly what you’re going to do in college, which major you’re going to choose and what career you wish to join, it’s easy to keep your loan amount down to a minimum. Instead of borrowing by the year, calculate how much you will need for the entire duration of your degree, and make plans accordingly. While it’s ok to borrow a little more for contingencies, don’t increase the loan amount just because the money is readily available. If you know what kind of a job you’re looking for after college and how much you approximately expect to earn in future, it’s easy to calculate repayment options too. Also, decide on your major well in advance and don’t change once you’ve made your choice. Changing majors is an expensive decision, in terms of both money and time.
Think through your options. If you’re planning to stay on in your hometown as a teacher or in any other capacity, or if you’re planning to go into business for yourself or with the family, an expensive degree is really not necessary. Instead, reduce your borrowings by attending a local college where you can learn without burning a hole in your pocket. Or if you plan to enter a particular occupation, choose community college that is less expensive and job oriented.
Minimize expenditure in college. Once you’re in college, try to live within your means. Find accommodation on campus or stay at home to save money, eat outside sparingly, supplement your income with a job, and don’t use loan money for frivolous expenses. Besides this, you must minimize credit card and other debt so that they don’t add to your burden when you graduate.
Finish college as soon as possible. And speaking of graduation, try and finish college as soon as possible. The longer you take, the more money you’re going to be spending to finance your education.
Student debt is one liability that cannot be wiped clean by filing for bankruptcy, so unless you are sure of being able to repay the money, don’t borrow more than you can afford to.
This guest article was written by Adrienne Carlson.