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As university costs continue to climb, student debt remains a major source of stress for countless people who have no choice but to finance their studies. But the problem could be worse than we thought. The US Federal Reserve reports that outstanding student debt has reached a record $ 1.52 billion. This is an increase of 145% over the level of 10 years ago.
In fact, Americans owe more money in student loans than in credit cards and auto loans. And while student debt may be a healthier debt than the previous one (especially credit cards), it is also a difficult obligation to avoid.
SOURCE OF IMAGE: GETTY IMAGES.
If you prefer not to join the ranks of countless Americans who are drowning in student debt, you can take certain steps to minimize your borrowing. Here are some to consider with force.
1. Stick to a public school
As tempting as it may be to attend a renowned college with an excellent reputation, you will often get a lot more for your money in a public public school. Not only that, but you will save a package on tuition and fees, thus limiting the amount you need to borrow to earn your degree.
The following is a breakdown of the average cost of tuition by type of college for the 2017-2018 academic year:
|
College type |
Average cost of tuition |
|---|---|
|
Community |
$ 3,570 |
|
Public in state |
$ 9,970 |
|
Public out of state |
$ 25,620 |
|
Private |
$ 34,740 |
SOURCE OF DATA: THE BOARD OF ADMINISTRATION.
As you can see, choosing a public university in the state rather than a private university could save you about $ 99,000 on tuition fees in just four years. And that's reason enough to stay relatively local.
2. Avoid private loans
Students whose tuition fees exceed federal borrowing limits often resort to private loans to make up the difference. But there is a danger to borrow privately. On the one hand, the interest rate on private loans is not capped in the same way as on federal loans. As such, you could end up paying the same interest on your student loans as you would with a credit card, thus increasing your total costs.
Another problem with private loans is that they usually do not offer any kind of accommodation for people who have trouble keeping up with their payments. Federal loans, on the other hand, offer a number of protections against borrowers, such as income-based repayment plans and deferrals.
If you can not get enough funds in the form of federal loans to cover all your tuition fees, it pays to work part-time to cover the difference or even take a semester to work and accumulate tuition . Many universities offer work-study programs that allow you to work on campus, allowing you to work even if you do not have access to a vehicle.
3. Accelerate your studies
Another great way to minimize your borrowing is to complete your degree in less than one semester. But to achieve this, you usually need to have a good idea of what you want to master. If you manage to quickly identify a major, charge yourself additional credits over a period of three years. or three and a half years will leave you far less in the hole than if you were to require four full years of study or more.
4. Pass the dormitory
Perhaps you have dreamed of living in a dormitory at the university and to create links with a new group of roommates. But before you embark on this dream, remember that if you attend a public university or $ 12,210 if you attend a private university, you will earn an average of $ 10,800 a year in university. A better bet? Live at home, save that money and commute to school. Even though you may miss the dormitory experience in the short term, you'll be grateful to have it done when your outstanding balance is $ 40,000 or less less than what your peers owe.
More than half of borrowers borrowing student loans owe at least $ 20,000 at the end of their studies. If you prefer to keep your debt to a minimum, make wise choices about where you study and how you will finish your studies. With a little luck, you will not end up drowning in debt as unfortunately so many graduates do.
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