Below are three strategies to help minimize your student debt:
1. Apply for Financial Aid
Complete your Free Application for Federal Student Aid (FAFSA) on time in order to maximize your chances or receiving grant money to help pay for college. Deadlines vary by state; for California, the deadline for state grants is March 2. Be sure to research and apply for private scholarships as well, and contact the financial aid office at your college to explore scholarships offered by the college.2. Explore all options
And don't make assumptions. Sometimes colleges and universities that at first seem more expensive actually end up with a lower net cost (the price you actually pay). An organization called Lend EDU completed a study of average student loan debt by state and by individual universities. The results may be surprising. California, with high cost of living and relatively high tuition rates for its public university system ranked #4 in lowest average debt per graduate. This is most likely due to the availability of state grants and institutional aid. Which state has the lowest debt per graduate? Utah. Looking at specific colleges, many seemingly expensive private schools top the list for lowest amount of student debt among their graduates. Again, this is likely due to generous financial aid policies; although the tuition at some of these universities can top $35,000 per year, many of them are committed to meeting students' full financial need. This means that many students are eligible for grants (free money) to fund their education, eliminating the need for student loans. Which schools have the highest average debt for graduates? Not surprisingly, that list is full of art and design schools, which tend to be expensive, without much in the way of financial aid.This is why many counselors (myself included) recommend that students apply to at least 4 colleges or universities, including a mix of public, private, in-state and out-of-state. With a broader range of choices, you are more likely to find a college with a financial aid package that meets your needs. Of course, you should not pick these colleges at random; you should look for a good fit based on a variety of factors, including average net cost (and possibly average debt of graduates).
3. Stay on Track
One of the surest ways to rack up debt is to spend extra time in college. More and more students are taking 6 or more years to graduate. Every extra year in school results in added expenses and pushes back the time in which you are actually making money and benefiting from your investment in college. There are several things you can do to minimize the time you spend paying for college:
- Meet with your advisor early and often. Without the guidance of your advisor, you may end up taking a bunch of classes you don't need, or getting behind schedule with classes that need to be taken in order, resulting in a longer timeline to graduation.
- Take a full load each term. Obviously, you don't want to overload yourself to the point where you have difficulty passing your classes, but if you just take the minimum each term, it will likely add at least a year to your degree.
- Use campus resources and get a tutor if you need it. Yes, this can be an extra expense, but if you fail the class, you will have to take it over (and pay for it again).
Everyone needs to decide for themselves the amount of student loans they are comfortable with. Of course, the best option is to avoid them altogether. Unfortunately, sometimes the only way to complete your education is with the help of student loans. Using the strategies outlined above, you can minimize your need for student loans, and more quickly reap the financial benefits of your investment in your own education.
