Going to college is very expensive unlike before our grandparents or parents were able to work through college and were able to graduate without student loans. Colleges in the U.S. has continuously increased their tuition fees and the rising cost of room and books while family income have been shrinking have taken toll on our finances.
CNN Money reported that there are now 40 million Americans who have student loan debt, with the average loan balance of $29,000. Student Loans are like any other loans if you default on payments it will compound and will increase interest. Some students are lucky to find part-time jobs to help them with their finances, unfortunately majority cannot find part-time jobs since the job market today is not that great. Also on the report, it said that student loan debt have been rising on an average rate of 6% annually.
So how can we lessen student loans?
1. You and Your parents should start saving early – this is the best and simple way to lessen the weight of student loan debt. Your parents can create a savings for your education where you and your family can contribute and save money for college. You can buy less expensive toys or gadgets and save your money for college instead.
2. Choose the right school – As parents we all dream of sending your kids to the best colleges but let’s be realistic these private colleges are expensive. If the cost of private colleges is too high for your budget you can opt to send your kids to public colleges where they can also get good education. Don’t fix your mind to one school you need to shop around and look for the school that will give you the most value for your money.
3. Create a budget and work hard to follow it – college cost is not just tuition, you have to pay for your room and board, food, laptop, textbooks, miscellaneous, and leisure. You got to have a budget and make sure you follow it. Splurging on things that you don’t need will get you in a deeper hole.
4. Plan on how to repay your Student Loans – After finishing your college degree you need a plan on how to repay this debt. If you don’t find a job immediately you need to have plan B. Make sure that you don’t default it will accumulate and will be a real burden. If you don’t pay your student loans you will ruin your credit rating and you cannot declare bankruptcy for student loans. If you don’t pay IRS may penalize you or may garnish your wages.
College is really expensive and can be a heavy burden for your finances but it is still a valuable investment, employment opportunities for college graduates are a lot better than those without college education. By following these tips you can make your college more affordable and easy on your finances.