Student loans are a necessary evil. It costs money to go to college. If you can’t afford to pay for school you’ll have to borrow the money – and pay it back.
The problem with student loans however is how huge the debt can get. As tuition rates rise, student loan debt also rises. In the United States, the combined student loan debt is currently at over $1 trillion. This trend will surely continue as states continue to balance their budget by cutting education.
Some have advocated for the forgiveness of all student loan debt, much like wall street received a bailout. While I’m not in favor of that, there clearly is a problem going on. Regardless of who is at fault, it is the students’ responsibility to ensure that they do not accrue so much student loan debt in the first place.
With a debt of $25,000 right after college graduation students are finding it downright impossible to afford their monthly payments.
When people graduate college they’re worried about finding a job and finding a new place to live. Yet this is the exact time that monthly payments on their student loans begin.
Not making timely payments on a student loan will damage their credit score. This drop in their credit score comes at the worst time – when they’re applying for a home loan for the first time.
The goal throughout your time in college should be to not accrue so much student loan debt because it can come back to haunt you. While you can’t do anything about reducing the tuition you pay, you can however reduce how much student loan debt you carry.
You can do this by both increasing your revenue and decreasing your expenses. To increase your revenue you can get a part-time job and do odd side jobs to make a little extra money.
The other method involves reducing your expenses. You could eat at home instead of dining at restaurants, you could use public transportation to get to and from school (you’ll get discounts for being a student).
You can also choose to rent textbooks instead of buying them. For example, you can rent a textbook on personal finance for less than 20 bucks instead of spending $150 to buy a new one.