College student loans have reached an ail-time high of $1.4 trillion but that may not be the worst part. Repayment behavior of borrowers looks just as bleak.
A Forbes report revealed that it takes more than 10 years for the average student to repay their loans, and that the loan default period for each individual sits at 4.9 years.
The type of degree and whether or not it is completed are two factors that contribute to the rising student loan default rate.
It doesn’t help that college tuition fees constantly escalate every year. In the last 20 years, tuition rates have had a significant spike.
With inflation taken into account, the increase has reached over 100% at public four-year institutions and at least 60% at private four-year colleges and public two-year institutions. In the same period, family income rose by less than 20% only! Imagine the disparity!
This is the main reason why several strategies have been created to lessen college expenses. Some of these strategies are easy to do, while some need extra effort to be executed. Nevertheless, everything is worth it when a college student decides to keep his or her debts to a minimum.
Here are some of the strategies that could help college students conquer the financial crisis and graduate without worrying about massive debts:
Find a decent college within or near your community.
Prioritizing university search is important especially if your main concern is college tuition and expenses. The thing about community colleges is that they are less expensive compared to state universities.
If you got enough funds, then the Ivy League universities are highly recommended for you; that is, if you pass their entrance tests.
But if you’re on a tight budget, it’s better to cut the costs of being away from home. Thus in your university search, look for decent colleges within or near your community.
Stay close to home.
It’s still better to stay closer to home or live with your parents or guardians. Aside from the fact that it’s more cost-efficient, you’ll get enough time to spend with family.
This will definitely spare you from homesickness. In addition, you and your family will be able to save a lot while you go about earning a college degree.
Save for a state university later on.
If there are enough funds later on, you can proceed on your university search for well-recognized schools in the state.
You can even aim for Ivy League universities to finish what you have started. Perhaps you can even pursue a Master’s degree without being anxious on large expenses and debts.
Live simply. Don’t spend beyond your means.
Being in college involves putting high priority on academics. Aside from this, it entitles you to acquire new knowledge and skills that will be most appropriate for the career path that you have selected. While at it, do not go around spending way beyond what you have.
Live on a daily budget.
Learn to lessen your expenses and save money for emergency needs. If you’re renting a room or an apartment, get a companion or a roommate.
When eating during breaks, bring homemade meals to school than spend money on food in the cafeteria or some restaurant.
Create a simple budget to ensure that your savings and expenses are properly allocated for. Bear in mind that living on a tight budget is just temporary and that everything will pay off once you graduate from college.
Allocate and save.
You may be thinking that living a simple life as a student may mean not being able to enjoy college at all. Well, think again. You can still have fun while saving up for future needs and allocating your savings and expenses.
Living a “normal” student life should not be that boring or dragging. We promise you; being frugal college student will reap you benefits down the road.
Work while you study.
Discover your skills and talents.
Recognize the skills and talents you possess and use them to earn additional income while in college (and essentially pay for it). College expenses can actually be decreased if you learn how to properly manage your time as a working student.
Go freelancing while studying.
You can still take regular classes while working as a storekeeper at night, for instance. You can also do online freelance jobs that may pay you at least $30 to $50 for projects like article writing, blogging, web designing, and so forth.
If taking on jobs on a regular basis without compromising school can help you cover college expenses by a few bucks a month, why not?
Aside from keeping your college debts to a minimum, working part-time lets you save enough money. The great thing about freelance jobs is that they open up opportunities that you could fully take advantage of when you earn your degree. Working while studying practically gets you a foot in the door.
Look for scholarship opportunities.
Why scholarship grants and awards?
Scholarship opportunities are a great help especially for those who have decided to pursue a degree in a state university. Scholarship grants and awards provide greater advantages to students who are on a tight budget. Most scholarship grants entitle the students to free or subsidized education.
However, students need to maintain a certain General Weighted Average every term in college. Some scholarship grants even provide additional allowances to suffice for their academic needs.
Include scholarship grants in your university search.
In your university search, look for scholarship opportunities that are appropriate for the degree you have chosen. The best thing you can do is to talk to the finance department of your university regarding the requirements to be approved of a scholarship.
Some local papers and organizations offer scholarship grants as their way to market themselves while helping college students.
Pursue work-study programs.
Normally, colleges and state universities do not offer alternatives to reduce tuition fees unless you go out of your way to ask them personally about it. Check if your school offers work-study programs or community service programs in exchange for tuition fee discounts.
There are colleges that offer “study now, pay later” programs or work-study programs that may provide you greater opportunities. This is to help you pay for your tuition fees and other college expenses. Some of them even let you earn money while studying.
Some examples of work-study programs include being a student assistant inside the campus or working for an academic organization while studying.
A loan should be your last option.
Why Student Loans?
Indeed, student loans are immensely helpful when it comes to paying for college expenses. But depending on the type of loan, the interest rates go higher for a certain period of time. This is the reason why loaning should be the last option to get through a financial crisis in college.
University search and student loans
In your university search, look for how to acquire student loans. They are not definitely offered for free. The greater you loan, the longer it will take you to pay it completely. If there are cases wherein you really need to loan, keep it to a minimum or just apply for a loan covering your essential needs.
You can do this through proper estimation of your total expenses in college, which will include tuition, daily allowances, room and board, and other miscellaneous fees. Don’t loan beyond what you actually need.
Pay loan interests immediately.
Decrease loan balance.
There are certain loans that do not require repayment until after you graduate. However, even if there is no fixed schedule regarding your loan payments, you need to remind yourself to pay your loan interests as soon as you have enough funds. Paying loan interests while you are still studying is even better as it can eventually result in reduced loan interest.
You may want to ask your student loan company for payment alternatives. Through this, you can keep your debt to a minimum even before you graduate.
The thing about large student debt is that it haunts you even after you earn a reputable degree in college. It pays, therefore, to give debt-reducing strategies a shot and ease your way into and out of college with significantly reduced financial obligation.
College is meant to be enjoyed as you focus on your academics and on extra-curricular activities. It’s high time that you break free from the pressure and worries of handling student debts. Determine the right approach to help you enjoy college life minus the mounting debt.
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