Student debt: two words that frighten any college student the most as he or she heads into the future. It is a problem that many, including myself, have to grapple with.
As the cost of tuition is rising rapidly at many of the nation's high institutions of learning, individuals are having to contend more and more with the burgeoning prices by taking out loans that make take years if not decades to repay, all in order to just attend college. It almost seems like students must sacrifice an arm an a leg to receive an education, just to remain perpetually indebted to these institutions for the majority of their working years.
In 2014, the New York Times reported that students amassed over $1.3 trillion in debt, making up a tenth of all household debt in America. This figure is over double of the total amount owed in 2005 and rising tuition rates will keep students tackling this problem for the foreseeable future. New laws are being passed to alleviate future graduates debt, but even then the predicament will still remain, at least partially. Addressing this problem on a macro-level through the regulation of predatory lending may be the first step on a very long journey of eventual success, however for many, this is not an option when faced with defaulting on the loans. The best and most immediate solution may lie on an individual scope.
As a student at a university, I have to come to terms myself with this challenge. While I am fortunate enough to go to a state school (and therefore not pay an enormous sum of money to the "system"), I must still contend with the bill that I do have, whether it be through leaning on my family, working at a job, or applying for scholarships. Through these means I believe individuals can see an improvement in their situation, addressing the debt as soon as possible to prevent interest from drowning them in the future. Here are a few ways to cut your own student debt:
Working a Job
This is the route many students choose in paying off debt, juggling their studies with the responsibilities of a part-time job. I have a job myself, and although at times it is hard to balance my education with my job, it has benefits beyond the paycheck. For one, it encourages the development of time management skills. This is crucial in the real world with deadlines and having early experiences in this will give you a leg up over others. Working a job, even part-time, can also boost your resume, especially coming right off of college. It shows prospective employers that you not only can manage many responsibilities at the same time efficiently, but also signals to employers that you have experience in the real world and the skills that come along with it.
Scholarships
These are underutilized by many students and provide a way lower debt substantially without the commitment of a job. A range of scholarships are available, from ones offered by corporations (such as Coca-Cola) to ones offered at a local level and even by the colleges and universities themselves. Online services like Scholly and Fastweb Scholarships automatically search from thousands of available scholarships to match to your specific situation, whether it be for graduate studies, a specific major, or specific college. You can get thousands of dollars for your expenses just by applying and creating an essay.
Cutting Down Expenses
Sometimes, the best way to cut student debt is by paying more of it off, which means cutting on some luxuries to save that money. For example, if you watch Netflix, try going without it for a month and use Youtube and free services provided by the college to get your TV fix. If you normally spend money eating out at restaurants, try reducing the amount of times you go or even eliminate it completely for a few weeks. That extra money you save and pay the debt with will reduce interest that you will pay and reduce the headache you will have.
Leaning on Family & Friends
Many students are hesitant to ask some of the closest people around them for money, however, this might not be that bad of an option to consider. Parents and relatives will certainly be more willing to give or lend money than friends for example, and at the very least a call to update them would be appreciated.
In reducing debt that has already accumulated, there are ways to restructure the debt such as refinancing the loans, making bigger payments, and shopping around for lower interest rates that could save you thousands. However, the best way to pay off loans is to not have them to begin with or minimize their impact for the future.
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