How to Avoid Student Loan Debt

 

Do you have student loans?

If you do not, I bet you know a whole bunch of people that do have student loans!  

According to an article on CNN, four out of every ten people who have gone to college have taken out student loans to pay for it.  

It is reported that in 2018, Americans owe $1.5 TRILLION in student loan debt.  Student loans are the dark clouds hanging over your head all these years later.

Here are a couple more statistics from that same article

42% of people who went to college took out debt.  That is not only student loans, but they also borrowed other money and had credit card debt.

Average graduate owes over $28,000.

20% are behind on payments.

This has become such a huge issue for so many that truTV has come out with a game show called Paid Off where the winner gets their student loans paid off!

The interest rates on federal student loans are increasing for the 2018-2019 school year going from 4.45% to 5.05%

Interest rates for Parent Loans are going from 7% to 7.6%.

If you have student loans, there are ways to pay those off as quickly as you can to avoid all of that interest.  These student loans are the bain of most of our existence, forever causing stress to our already stressful lives.

Is there a way to go to college without debt?

I have a friend who is a single mom.  Her son is going to a private school for environmental sciences.  This private school costs over $40,000 per year to attend. 

That means everything;  Tuition, room, board, fees, books, and supplies are all included in this price tag.  

He is getting a fair amount of scholarships and grants but not nearly enough.  He was only allowed to take out a certain amount of money, so she took out a parent loan for him.

I asked if there were other schools that he could attend offering the same major.  Of course, there were, but he wanted to go to THIS school.  So she signed the paperwork for the private school.

I know another graduate from a private university who graduated with a degree in marketing.  She owes about $100,000 in student loans.  When I asked her mom about it, she said: “It’s her money and her life!”

A couple of physical therapists I know who work in a school were chatting with me about the astronomical amount of their student loans again, from a private school.  

When I asked why they chose that particular school, they said it was the only one in the area, and they wanted to stay closer to home.

How to Avoid Student Loan Debt

This is how my husband and I decided to pursue our son’s higher education needs.

Before we go any further, you should know that NY has a program called Excelsior Scholarship which allows any student whose parents make less than $110,000 per year starting in the 2018-2019 school year and then $125,000 in 2019-2020 to go to a New York State college tuition free.  

This scholarship is an excellent opportunity for so many to get their tuition paid for at a State School. Of course, there are specific rules and guidelines that do apply.

But before this came into effect, we have been discussing our local State School with my son since he could say the word college.  

This way, he could still live at home and take care of the first two years of prerequisites.  At that time, he could figure out what he wants to start off his adult life doing.

It was decided for him that there would be no student loans.  We would not sign them nor would we support his decision if he chose to do this independently.

Avoid Starting Adult Life With Debt

We would join financial forces, and we would pay for college together.  He would need a job. Even with this tuition scholarship, he will still need to pay for books and other supplies.

This same opinion of student loan debt will continue after those first two years.  If he chooses to continue right away, his tuition scholarship will also continue.

I have read so many articles and listened to people explain how they went to college without student loans.

From writing essays to the most obscure scholarships like Bausch and Laum because you wear contacts to Ford because your dad drives one.  

Also, having a job where your company will pay for your college is one of my favorites.  Getting a job in a hospital working as a pharmaceutical runner or inpatient transport could open the doors for other opportunities, and you may find that the hospital will pay for your education.  

I know a woman who worked in the medical buying department and the hospital paid for her to go back to school for nursing!  There are ways to do it, but it takes work.

If I knew then what I know now…

You see, it took me a long time to pay off my student loans and I know the stress it caused me, and it created for all of my friends.  It is not good for our lives to be living under this cloud of debt.  

I will not give that to my son.  That is not a gift.  It is a fog of doom that you need to walk through every single day.

How student loans can affect your life.

I know a woman who wanted to go to college all her life.  She finally got up the courage and the opportunity to go in her 50’s after her children were grown and gone.  She took out student loans.  

One thing leads to another and life happened, and she was not able to pay off those loans.  

Now, in her retirement, the government has garnished her social security, and she is living below the poverty line (just a note: research and actions are being done by her and her family to assist).

Others have had their wages garnished as well as their income tax returns.

If you are continuing to pay those student loans, those payments can be $300 a month up to thousands depending on how much you borrowed.

Think of what you could do with that money!!!

I do understand that sometimes if the return on investment is good, it might be justifiable to take out loans. If you are almost guaranteed to start out at a high salary as a doctor or lawyer, for example, it might be a good investment.  

But keeping a frugal mindset and only taking out what you REALLY need is your best option.

Do not borrow enough money for tuition, room, board, books, a new computer, and money to order pizza every Tuesday and Friday nights as well as a new wardrobe!  Think logically about the best strategy and the least amount so you can pay it off as quickly as possible.

Think not like an invincible 18-year-old and think more like a smart, educated adult.  Do you want to be paying off these loans for the next 15 years of your life?

Think of the effects this debt will have on the rest of your life.

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