As a student, I understand firsthand the tension between my bank account and university tuition. My peers voice similar concerns constantly, and at times, the price tag on education can feel overwhelming.
Though I understand that each person’s situation is unique, there are many general principles that are helpful to students in avoiding college debt.
1. Create a budget.
The first step is to create an official, written budget. Do you have a job? If so, think about how much you make each month. Your budget must be centered on your income.
Track your spending for a month or two. Be honest with yourself. What are necessities that you absolutely need to include in your budget and what are luxuries that you don’t actually need? Consider your meal plan, groceries, snacks, school supplies, gas money, church tithes, utilities or anything else applicable to you.
Unfortunately, as a student, you will almost always spend more than your income in tuition alone.
However, you are always in control of your recreational spending. That includes things such as snacks, coffee, entertainment (Netflix subscription, Spotify Premium, concerts, movies etc.), more coffee, transportation to extracurricular activities, food outside of your meal plan and other things that are not technically necessities.
Monitor your financial behavior so as to build strong habits of responsibility, as well as to keep yourself from struggling with debt in the future.
2. Be wise with your job.
Most undergraduate students work part-time while at school. It is very important to put away a portion of your paycheck into a savings account or fund dedicated solely to tuition.
I realize that saving any significant amount of money at this stage in life, though important, may seem a little ambitious for many students. Living paycheck to paycheck to meet the monthly tuition deposits can make saving money a daunting prospect.
However, even if you only put aside $5 of every paycheck, that small amount will add up and eventually be very important when it comes time to repay your student loans.
As a side note, every bit of money that you earn is helpful, but it is not worth your psychological health. It’s easier to repay your student loans than to attend counselling or therapy for the rest of your life.
So, while it’s very good to have a job and consistent source of income, if you find yourself constantly sick because you don’t have any time to sleep, unable to do homework because you’re insanely stressed all the time or exhibiting any unhealthy signs that you can’t handle everything in your schedule, it is more beneficial in the long run to not attempt a constant job during the school year.
Also, if a job conflicts with your schoolwork too much, it’s not worth it. It’s better to keep your grades up and apply for scholarships than to work yourself to a pulp and end up in therapy.
3. Know your loans and have a plan.
Research your loans so that you know exactly when you have to begin paying them back and how the interest rates work with your specific loans.
As soon as you leave college and get a “real job,” don’t think that you can throw your budget out the window. Yes, it will need adjusting, but you still need to be wise with your money.
Stay on top of repayment. Come up with a plan, and stick to it. In order to pay back your student loans, you must pay more than what the government says your monthly payment is.
The average college student graduates with approximately $28,000–31,000 in student debt.
Hypothetically speaking, if you have $28,000 in unpaid student loans and you pay back $250 every month, it will take you 112 months to pay off your loans. That is a very long time.
Think about your repayment plan before taking out a student loan. Start saving right now so that you can get rid of that debt before you turn 134.
4. Other steps to take.
Clearly student loans are things to be wary of. Don’t take out any loans you don’t absolutely need.
Check and see what scholarships your school offers. Then check again.
Set aside time once a week, or even once a month, and commit to applying to a certain number of scholarships. Apply for any scholarships you’re eligible for.
Though paying for college can be daunting, it is not impossible. In fact, with careful planning and persistence, it is a completely manageable process.
