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How are you going to support yourself after you graduate high school? Many students will say go onto college, but is that the right choice and how do you prevent student loan debt from consuming your paycheck after college? If you are not lucky enough to have a plump 529 fund or get glorious scholarships to every school, there are other options to consider.
Are You Really Ready for College?
If you are terrible at school or don’t want to go, it probably makes no sense to go to college for a 4-year degree. Why go into debt for no reason?
Our neighbor’s high schooler stated he is going to community college, so why bother doing homework or really caring about grades?
If this is your general outlook, do you think that all the study skills you decided not learn in high school will magically develop the moment you get on a college campus? Probably not!
Other high schoolers feel that going to college is just the right thing to do, even if they have no idea what they want to do as a career. Does it make sense to jump into college without having a plan?
College costs a lot of money. Many people drop out of college and get stuck with serious debt. If you are not sure about why you are going to college, it may be wise to consider other options.
What other options?
Trade schools and the military lead to good jobs. Additionally, there is no shame in taking a year off to explore different career paths. Internships are a great way to tryout a variety of majors without going into extreme debt.
College does not need to be the answer for everyone.
If you are to college, it does not need to be today. It is best to go when you are truly ready.
The potential student debt issues are really and crippling. Prevent unnecessary student loan debt by asking the tough questions upfront.
But I am really going to college
Ok. I get it. You are still set on going to college. I have multiple degrees, so I am not against college!
Here are a few ideas to reduce the chances that you end up with a mountain of debt.
Remember you will be stuck with your college debt as bankruptcy does not cover student loan debt.
1. Have a Budget
Know how much you can logically afford before selecting a college. Ultimately, this is a financial decision. Which college will give you the best return for your college investment? The answer is frequently not the most prestigious school.
Don’t forget to budget for housing and food. These are real expenses.
Stick to your budget and evaluate how long it will take to payback the student loan. Don’t forget to take into account the potential for graduate school. You don’t want to still be paying off student loans in your 30’s.
2. Take AP Courses in High School
Advanced Placement (AP) classes are high school classes that are covering college material. If a student passes the AP test with a 4 or 5 (out of 5), there is high potential that the college will give the student college credit for the class. Every college has it own scoring requirements for credit. Some accept a 3 out of 5.
There are two very good reasons to take AP courses:
1. Taking a college level class will help you evaluate if you are really ready for the rigors of college. If you do not do well in AP classes, it is a warning sign that college might be extra difficult for you.
2. Passing the AP test means spending less money on college!
For highly motivated students, it is possible to have 5 or more AP classes credits before even attending college.
Potentially, eliminating a complete semester of college is awesome. With college costing upward of $60,000/year, this is a real money saver.
An AP test costs about $100, so the payback is worth it.
3. Taking Classes at a Community College
Particularly in the Midwest, community colleges are part of the state university system. There are programs at the community college that are specifically designed to transfer into the large state universities including highly competitive fields like engineering and nursing.
Obtaining your associates degree and then transferring to the state university allows the student to live at home to save money. Additionally, the cost of the community college is usually 1/3 the cost per year of the large public universities.
Community college transfer programs prevent student loan debt from being unbearable the first few years of college. It also gets students the opportunity to feel out if 4-year college is the right path. There are plenty of good paying jobs that require a 2-year degree.
If you are not sold on attending community college full-time, consider using their classes to lessen your university course load.
Why spend $3,000 or more to take freshmen English, when you can spend less than $1,000 to take it at the community college and the course transfers to most universities?
Community colleges offer a surprising array of classes in the summer.
Why not get the electives done at a fraction of the price?
4. College Major
If college is in your future, now is the time to consider a financially logical major. Many fun majors will not pay the daily bills after graduation. Pick a major that will make money and minor (or double major) in your joy.
Additionally, the financially savvy major still needs to be something you can stomach. Why become an accountant if you hate math? Please don’t become a teacher if you dislike kids.
There is zero reason to go into debt to have a degree you hate or to have a degree that will not support your lifestyle.
5. College Selection
Don’t have your heart set of a college without looking at the financials and verifying the college has the major(s) you are interested in pursuing.
Unfortunately, money matters in selecting an university.
There are hard questions to answer like will that college that costs $70,000/year really get me a job that is so much better than a college that costs $30,000/year? Most the time, the answer is no. One of the best ways to prevent student loan debt is being wise in your college selection.
You might want the fancy named school, but it doesn’t make financial sense.
If you are going onto graduate school, how much debt do you really want to have long-term?
Usually, it is the university name of the last degree that matters.
If you do well at a “less prestigious” university and are a well-rounded student with good recommendations, you will still have the opportunity to get into the more prestigious universities for graduate school.
Looking at the entire financial picture matters. You don’t want to be paying off your student loan debt in your 40’s.
To prevent student loan debt from being out of control when you graduate, serious upfront consideration and preparation for college are required.
College is a critical financial decision. Messing up this decision can leave you will heaps of student loan debt. Don’t underestimate the impact of student loan debt. It can impact all aspects of your life. There are articles that question if you should marry someone who has student loan debt. Wow…so much for better or for worse.
In recap, if you are truly committed to going to college:
1. Make a Budget
2. Take AP Classes
3. Investigate Community Colleges
4. Get a Major that Pays
5. Select a College that Makes Financial Sense
College is a wonderful experience. It should be enjoyed and not leave you fretting about how to pay the impending debt.
College is also a time to begin getting serious about finances. Start making smart financial decisions early and reap the rewards. Plan now to be a self-made millionaire.
Pin this article for reference and read some of the articles below to prepare for a successful financial life.
Good luck on your college journey,