In life, college takes the form of the biggest money grabber known to man. From lack of funds to wracked up interest on loans, prepare yourself to walk out without a dime in your pocket. So you ask yourself, who needs college? Unfortunately, pretty much everyone. Many jobs within career communities have begun raising educational requirements for entry level positions. In a system that thrives on luring people into a quicksand of debt, you must watch your step to avoid falling into the trap. Nevertheless, a number of solutions, tricks for debt management and advice fill the life of college students.
Check out some tips for debt management from financial professionals.
How many of you waited until junior year, if not senior year, to begin talking about college and financially planning for it? “The cost of education has skyrocketed so drastically over the past few years that if they wait until the junior, senior year of high school, they’re way behind the eight ball,” said Ronald Ramsdell, founder of College Aid Consulting Services. Too much goes into the process of college planning that you need to get a jump ahead of the game in order to better your options.
Before high school, parents should strongly take their student’s future into consideration and allocate the time and investment necessary for success. “Parents, once they have their precious little child, start a college education fund right then and there,” said Ramsdell. “It should be a joint team effort to get the student into the best school of their choice for the best financial aid possible.”
Communities boast plenty of scholarship opportunities, grants and loans. First look into Federal Direct Student Loans for the best interests rates—the percentage of a loan that gets paid per period of time. Remain hesitant and mindful when it comes to private loans. In the past, they were the best resources out there but years later, the system shaped them into a money trap.
Now let’s get down to the loan business.
“Let’s be realistic—most students cannot completely avoid loans,” said Kathy Ruby, a College Finance Director at Bright Horizons Education and College Advising. “As long as they are managed carefully, they can truly help you attain your goals.” The key to management lies in entering a loan fully aware of the terms and benefits, as well as keeping track of the amount borrowed, the amount borrowed in the future and the payment outlook.
Not going to lie, sometimes life just seems better when you ignore your problems and stresses. “Some students are so worried about what they are borrowing that they bury their heads in the sand and ignore their student loan debt until after they finish college,” said Ruby. “Knowledge is power.” An online student loan calculator should become your best friend throughout your college years. Bankrate.com and studentloans.gov boast extremely helpful and accurate calculations. Moreover, acquiring the loan with the least amount of interest stands as the main objective. If you can, always go for subsidized loans versus unsubsidized loans because they remain interest-free throughout your college years.
Another pivotal resource for parents and students to utilize presents itself in the 529 Plan.
With a 529, you build funds by supplying into one or more investment portfolios through a savings account. A quick tip: to increase the amount of funds received, place the account’s name under your parents since the government views student assets with more weight. In addition, these plans allow for tax deduction, waived federal income tax and reduced state tax. Starting to think that you waited too long to start a fund or look for scholarships or apply for grants and aid? Remember, college saving never comes late, no matter how close your start day looms.
If FAFSA and loans don’t seem feasible, take full advantage of scholarships and grants.
“I recommend to all my juniors and seniors to apply to at least three scholarships a day,” said Rolene Anderson-Solomon, the BRACE advisor at Plantation High School. “Aim for 100 percent of the Bright Futures Scholarship.” In Florida, if they work hard enough, high schoolers can earn this scholarship that covers 100 percent of tuition. Don’t live in Florida? Take the time to research the state based aid and scholarships that the government provides. For example Georgia, Tennessee and several other states offer the HOPE scholarship, which provides a large sum of money towards college tuition. “One big misconception is that students pay the ‘sticker price’ when in fact, many do not,” said Ashley Walters, a College Advisor at St. Thomas Aquinas High School. “Colleges can award scholarships to students upon acceptance.” Because of this, hold your horses on getting frightened by the cost that you see. It very well may not come out as expensive.
The work does not stop upon acceptance. If you plan to move, find the best options for you.
Extensively research housing, whether on campus or off campus. Many housing offices offer gift incentives, such as gift cards, and special offers, such as reduced rates. Also, find the best cell phone plan for you—something affordable that meets your needs. Furthermore, look into cheaper transportation options. A good chunk of universities carry a transportation fee as part of tuition that provides students with free public transportation. The University of Florida, for example, allows students free bus rides as long as they provide their UF ID. Furthermore, many college towns incorporate bike lanes on the roads for bikers. Also, if your state laws do not require insurance on a scooter, you can save several hundreds of dollars each month if you go down that route. With such a wide breadth of opportunities to save, jump for as many as possible.
Stopping by the financial aid office in order to ask about in-house scholarships should be a top priority. Don’t stop there; throughout college continue to search for scholarships and grants. “There is so much money that kids leave on the table every year for scholarships just because they don’t want to be disciplined and apply to scholarships,” said Anderson-Solomon. “Yes, I understand it is time consuming. But you will greatly appreciate it later.” While in college, you could also consider becoming a resident advisor. Many universities provide reduced, if not free, room and board to their RAs for the time that they hold the position. Put work studies into use; they offer flexibility, doable hours and they do not get looked at when applying for FAFSA. The road to reducing debt never stops, but with knowledge of the resources out there, it can be less strenuous. So stop stressing and wipe your tears because staying out of debt marks your future.