Can you believe that tuition costs for public four-year colleges have increased by 213 percent in the last 30 years? The thought is mind-blowing. Yet, it’s oddly logical in the context of the rising student debt crisis. In only 10 years, student loan debt in the U.S. has increased $833 billion to hit a record-breaking $1.5 trillion. To put it mildly, college is wildly expensive. So, students are turning to student loans for college. While many say that student loan debt is “good debt,” it never feels good to have debt looming over you. How do you manage hefty student loan debt (thanks, high college costs!) and avoid feeling bitter post-graduation?
Here are seven tips to ensure you don’t leave college full of debt and regret
1. Focus on scholarships & avoid student loans for college
The best way to avoid student loan regrets is obviously to not take out any student loans for college. This isn’t always a possibility depending on your situation but there are other ways. Hunt for any scholarships and grants that could help you pay your college bills. MoneySolver offers scholarships throughout the year, which you can apply for by clicking here or clicking the button below.
Researching and applying for these opportunities as soon as possible is key. Free money is way better than the money you’ll have to start paying off almost as soon as you graduate. Trust us, that first payment comes sooner than you think.
2. Apply for federal student loans ASAP
Another way to lessen potential student loan regrets is to reach out early to see what student loans you could get. If you’re going to take out any student loans, your best bet is to take out federal student loans first. To do this, you’ll want to fill out the Free Application for Federal Student Aid, or the FAFSA. Federal aid is given out on a first-come, first-served basis. The FAFSA becomes available to complete in October. Make sure you fill it out as soon as possible and repeat the process every year you’re in college. Otherwise, you could miss out on grants that don’t need to be repaid.
Because it asks for tax information and your parents’ salary information, you’ll likely need help from them to fill out the FAFSA. Sitting down with your parents to complete the form is a great way to start talking about college costs.
3. Talk openly about money with your parents
Only about 26 percent of parents say that they will be able to pay for all or most of the college costs for their kids. Instead of assuming how much your parents will pay for your college education, talk to them. If your parents are helping you pay for college, be open and honest. Discuss how much they’ll be able to contribute so you can know how much you’ll need to bridge any gaps. You’ll also want to know how they intend to contribute to get the full picture. Will their contributions come from savings? Will they be taking out loans on your behalf? Are they willing to cosign any loans for you?
Your parents can also help give you a realistic view on the general costs of college and adulting. Is your dream college worth the price? Will the salary of your dream job allow you to pay back any student loans for college? Use your parents’ expertise and experience to your advantage.
4. Commit to getting your degree and using it
One of the biggest regrets you can have is not finishing college and still being stuck with massive amounts of student debt. Students who drop out are four times more likely than graduated students to default on student loans, making up 63 percent of student loan defaults. If you’re not sure that you want to go to college, it may be wiser to start at a community college. That way, you can explore your interest in college without spending too much money.
One of the main benefits of going to college should be the return on investment you get from your degree. You put money towards your degree so it can net you more money in the long-run. So, don’t get your degree and then settle for a job that doesn’t need or reward a degree. That’s a surefire way to regret all the work and money you put into college. Instead, have a plan to get a job after you graduate that is fitting for your degree.
5. Work through college
Having a job can help limit the amount you need to borrow. Incoming paychecks ensure that you can pay now for college instead of later. Making payments on your student loans while you’re in school is a great idea. It can make a big difference in how much you have to repay once you graduate, especially if you have subsidized student loans. Don’t think you can balance a job with going to school? In 2017, about 44 percent of full-time students and 85 percent of part-time students were employed. On-campus jobs are ideal. But keep an eye out for any nearby off-campus jobs or paid internships that might prepare you for your dream job.
6. Know exactly how much you’re taking out (and how much you need)
Around half of all first-year students in the U.S. seriously underestimate how much student loan debt they have. Don’t fall into that group. Not knowing how much you have taken out in student loans can lead to a very unhappy surprise down the road. So when you’re applying for student loans, do your research and compare your options. And when you decide which student loans you want to take out, know how much they are and how much you’re expected to repay. Ensure you don’t borrow a cent more than you need.
If you find that you haven’t taken out enough, you may decide to take time off of school to save money for next semester. This puts you in a sticky situation, as your loans will become due while you’re not enrolled. You need to stay enrolled to take advantage of in-school deferment and avoid having to make payments. Work with your parents and financial aid advisor to ensure you have enough to cover your college costs.
7. Ask questions now, not later
There is no stupid question when it comes to student loans for college. The whole financial aid process is full of so many new words that it can feel like a different language sometimes. If you don’t understand something, speak up. Ask your parents, your counselors, and any financial aid advisors at your college to clarify any points of confusion. Because you don’t want to be left with student loan debt that you didn’t understand in the first place. That’s a regret you can easily avoid.
For some, student loans for college are inevitable. But you can avoid the regret that many borrowers experience upon graduation. Being informed and prepared is the best way to keep yourself from feeling bitter about student debt.
Disclaimer: The viewpoints and information expressed are that of the author(s) and do not necessarily reflect the opinions, viewpoints and official policies of any financial institution and/or government agency. All situations are unique and additional information can be obtained by contacting your loan servicer or a student loan professional.