How to Keep Student Loan Debt to a Minimum
If you are finding that you need help to pay for college and are considering taking out a student loan, you should prepare to be smart with the funds you get. While it can be tempting to borrow a large sum of money if it is offered to you, years down the road you will likely regret this move when the time comes for you to pay the loan back. If you want to avoid ending up with student loan debt that requires a monthly payment equal to your mortgage, you should learn how to keep this cost to a minimum.
Be Realistic When Looking at School Tuition
First of all, if your desired major is offered at most colleges, you should consider enrolling in a school that offers you the most for your money. This is often a local state college. Depending on how far along you are in school, you may even want to attend a community college, where you can usually get your basic introductory classes completed and which usually costs less per semester than a four-year institution. Look at the tuition of all the colleges you are interested in, keeping in mind that you will likely have less student loan debt if you end up graduating from one of the more affordable schools.
Get Grants and Scholarships When Possible
Of course, if you are fortunate enough to be offered a great financial aid package that includes just a small amount of loan assistance, or perhaps none at all, you should strongly consider it. Grants and scholarships do not need to be paid back like student loans do, and so if you get these you may be able to afford a more expensive school.
Scholarships and grants are highly sought after, but you have a good chance of getting at least one when you apply for several of them. Once you know what kind of free financial aid you can get, you can decide if it is worth it for you potentially take on some student loan debt to be able to cover the balance of the tutition you need to pay for the costlier college.
Don’t Take More Than You Need
If you do have to endure student loan debt to pay for tuition, try to keep the total to a minimum. Many students take out more loans than they need so they can buy a car, computer or other consumer goods they could not normally afford. But they have a rude awakening when they have to start repaying the loans a few years later.
It may be nice to get your hands on a large sum of money now instead of waiting until you get a full-time job and can afford a larger loan, but that money comes with a price. It’s called interest, and it can get out of hand within just a few years. If you need to buy a car or other costly items, you should consider getting a job or a paid internship if you do not already have one. If you still cannot afford the things you want, this might give you motivation to apply for more grants and scholarships to help you out a little with money as you go through college.
It may be tough now to avoid taking on more student loan debt than you need, but in a few years, you will be glad you exercised some restraint. You do not want to graduate from college with thousands of dollars to pay back over the next five, 10 or even 20 years. Minimizing your student loan debt can keep you from ever having to face this kind of scenario.