There’s a harsh reality when it comes to paying off student loans. Do you want to know what this harsh reality is? A majority of student debt is the direct result of acquiring high amounts of student loans to pay for a college education that will financially not justify the investment.
What does this mean? It means that if you want to work in a field where you won’t be making lots of money, it’s going to be difficult to justify the 50 grand in student loans.
Why does this happen? Why do young people acquire massive amounts of student debts that will follow them for decades to come? Is it possible to figure out how to reduce student loan debt early on?
Unrealistic expectations about student loan debt.
To be honest, I don’t think many of us knew what to expect prior to beginning college. Some of us had unrealistic expectations going into college, while some of us really had no expectations. Either way it’s rare that most young people think about paying back student loans or student loan consolidation prior to entering college. We all think we can start an online business and launch the next Facebook.
We all want to change the world. We also want to make some money doing it. Some jobs are very rewarding (i.e. Social Worker or Teacher) but simply don’t earn what is considered a “high income.” These are very well respected jobs in society. Unfortunately, they don’t lend themselves to earning a justifiable income for the high amounts of student debt that may be used to get them.
Lack of information.
Sure we all look into salary expectations after college. The only problem is that most of us are fairly biased when conducting this research. Nobody looks at the low-end. We all look at the high-end and expect to be making the big bucks right off the start.
This begs the question: is a college education still a decent investment?
At the end of the day I think that it still is. Without dwelling into a debate about the ROI of a college education, I would like to move on to the next topic… Now that we’ve discussed why student debt is often very high, let’s try to look at how this can be combated.
How can you minimize the amount of student loans you acquire to pay for college?
Paid work terms.
A paid internship can do wonders for your student loans situation and how you pay for college. Not only will you get a chance to throw your name out there, but you’ll make some money too. Don’t dismiss the small wage that most work terms offer. Earning money throughout your college career can put you well ahead of your peers. You can also have some money to invest in the stock market.
Work during the summer.
If you have no luck with finding a work term and can’t slip in a part-time job into your school schedule, you can always work during the summer. I’ve heard many young people balk at this idea, but it’s really not that bad. There’s usually not much going on during the week as it is. You might as well use this time to make some money. Sleeping in until 3 and watching Fresh Prince of Bel Air reruns isn’t the best way to spend your summer.
Attend a community college/school close to home.
An option that I’ve discussed in the past when it comes to saving money on college tuition is to attend a community college. A community college education may not be as prestigious as attending a private college.
However, the real question here is: can that community college education land you a similar paying job? For many careers the answer is no. For some careers the answer is yes. It all depends on your situation, what you want to study, and what field you want to work in after college. All I’m saying is that you shouldn’t dismiss the value of a community college education without at least looking into it.
I DO understand that there’s more educational assistance available from private schools. What needs to be taken into account is the cost of moving, rent, and all of the expenses that come with living on your own. You could save thousands of dollars by staying at home to attend college.
Of course, you do miss out on the college experience (drinking on Tuesday nights) but you won’t have to deal with student loans into your 40s.
Please try not to fall victim to this harsh reality of the majority of student debt. I understand that college is likely the most fun time in one’s life. I’ve certainly had my fair share of fun the last few years. Just make sure your student debt doesn’t plague you as you want to move on in life. We want to help you with student loan debt before it’s too late.