10 Easiest Ways to Stay Out of Debt in College

Just because the average graduate carries more than $25,000 in student loan debt doesn’t mean current students and future students should accept the same fate. There are different ways to limit or reduce your loan balance before graduation.

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 In 2005, the average number of college graduates who left campus owed $18,259. This year, college resource estimates the average graduate balance is $35,052. 

stay out of debt in college
Photo credit: Montgomery

10 Easiest Ways to Stay Out of Debt in College

To avoid college debt and the problems accompanying it, students can employ many strategies, depending on their timeline to their graduation.

Fundamentally, students either have to you have to reduce the cost or increase other sources of money besides loans, “There’s no other way” Every dollar you borrow now as a student works out to $2 you will have to pay back later.

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Below are ways how to reduce borrowing/stay out of debt in college

#1. Pick a Less Expensive College

The lower the cost, the lower the debt burden, so research and talk about college expenses well before it’s time to apply to any college.

Parents should take charge and talk about the colleges that work with the family’s savings and budget and how college choice will influence the loans required. 

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#2. Save

As a college student, if you have a longer timeline to work with, the best strategy to use is to “Start saving.”

Although 87 percent of parents expect their children to attend college and benefit from that education, just 49 percent are saving for that desired goal, according to a survey by Sallie Mae. 

#3. Plan Out Your Spending Strategies

Think about paying for college as a 4-year strategy rather than one to assess year by year, said Evelyn Zahlen, president of Inspired Financial in Huntington Beach, California.

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Depending on how much you have saved, splitting savings evenly across 4 years may not be the most brilliant plan.

“Then you are borrowing money in years 1 and 2 and accruing interest over 4 years, which you may not need to do.

It can also hurt to have a big cost gap in later years that exceeds the capital on federal loans, requiring families to turn to costly private options.

It can help to hire a consultant or a planner to find the best strategy for saving money when factoring in rising costs.

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#4. Borrow Wisely

Maximize the federal student loans before turning to private ones. Private loans have higher rates and may allow interest to compound more frequently while you’re in school.

More importantly, private loans don’t have the same deferment, forgiveness, or forbearance provisions.

#5. Transfer

Starting at a community college or other low-cost option to transfer can cut costs substantially.

During the 2015 academic year, the average tuition and fees at a 4-year private college were $31,231, according to The College Board.

In comparison, fees and tuition at a public 4-year college cost $9,139, and at a public 2-year college, $3,347.

But transferring is a strategy that requires special planning. Credits don’t always fulfill required classes, limiting which colleges one can transfer to and requiring more time to earn a degree, eating into any early savings. Transfer students are often offered less financial aid than if they enrolled as freshmen.

#6. Finagle Financial Aid.

During 2014 to 2015 academic year, the average undergraduate received $8,080 in grants, while graduate students received $8,540.

That’s aid that doesn’t have to be paid back. These offers could sometimes be negotiable, and aid may free up once enrollment is set.

“Don’t be afraid to ask,” of course; you can also hunt for outside scholarships—check to ensure that the college won’t count them to reduce the aid it offers.

#7. Accelerate Graduation.

Map out classes to get that 4-year degree in no time or graduate in 4 years with 2 majors or part of a graduate degree under your belt. A necessary step you can take to make sure you graduate in less time is to plan a path from your enrollment to completion.

The classes are you going to take? When to take the classes? It may have to take this class this particular semester.

If a class is full, make your case and ask for an enrollment override from the dean’s office or the professor.

Although some colleges require 12 credit hours per semester to be considered full-time, they may allow students to take up to 18 hours before incurring additional tuition. Or add in a summer class, which is usually less expensive.

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#8. Pay in Installments

If you can pay the college tuition, but not all at once, ask about a tuition installment plan instead of loans. These slip the bill into equal monthly installments over a semester. There’s an upfront setup fee, but it’s less than $100.

#9. Cut Living Expenses

If you are using student loan money to cover expenses beyond tuition, consider what you can do to reduce those costs.

Financial choices always have implications, and in the case of student loans, ones that can take 9 to 15 years to pay off.

It might imply living at home instead of on campus, borrowing textbooks instead of buying them, or reducing dining-out expenses to make the most of that included meal plan.

#10. Work

College students can use work-study opportunities to reduce loans. Taking too many hours may consume necessary study time to keep grades high enough to retain scholarship funds.

Opting for an off-campus job and financial aid could be reduced if you earn more than $6,400 in the 2015-16 academic year.

FAQs

Why is Student Debt so High?

The relatively high rates are partly due to the demographics of incoming students and partly due to the opportunities afforded to graduates of these institutions on graduation.

What Profession has the Highest Student Loan Debt?

Registered Nurse: Nursing salaries—and the student loan debt nurses carry—depend on education level.

Nurses with a master of science in nursing have the most student loan debt, while those with a bachelor’s degree or associate degree have lower debt but may also have lower salaries.

Which Degrees have the Most Student Loan Debt?

The major with an enormous median debt out of any other major is Pharmaceutical Sciences, Pharmacy, and Administration at the Doctoral level: $271,378. The major with the smallest median debt out of any other major is Mechatronics, Robotics, and Automation Engineering at the Associate’s level: $6,500.

Is it Worth Going into Debt for College?

Unfortunately, there is no single wrong or correct answer to this question. Whether or not earning a college degree is worth the costs associated with student loans is ultimately a personal decision based on an individual’s unique personal and financial situation.

How Much is too much College Debt?

This ensures you have enough income to make your student loan payments comfortably. So if you anticipate earning $40,000 in your first entry-level job after graduation, you shouldn’t take out more than $40,000 in total student loans.

How Long do College Students Stay in Debt?

The average student borrower takes 20 years to pay off their student loan debt, and some professional graduates take over 45 years to repay student loans. 21% of borrowers see their total student loan debt balance increase in the first 5 years of their loan.

Watch the video below to know the ways to stay out of dept in College:

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