Written by: Kylie H.
As we are graduating high school, most of us are going far from home. If this is the case, then what happens when your dream college does not offer dorms? You now have to live in an apartment. You might be stressed out because you cannot afford an apartment right now. You might give up and choose a different college with dorms or a college closer to home. Do not give up your dreams, and follow my plan to manage your finances to afford that apartment!
First, you will definitely need a side job while you are in college. Even if you have started saving up in high school, you will still need to pay monthly rent. After you have a job, you need to determine the amount of money you can afford to spend on the apartment. In order to do this, you divide your gross annual income by forty. Next, you should apply for financial aid and student loans but take into account that the U.S. Department of Education also lets you use the loans for housing and living expenses alongside education.
The advantage of taking out a student loan is that it allows you to afford college and housing. Paying off student loans also helps you build up credit. This will help you in the future when you are planning on buying a house. Better credit allows for better things in the future. On the downside, student loans come with a huge disadvantage. Student loans can be very expensive. When you take out student loans to pay for college and an apartment, you do not just have to pay back the amount you borrowed, but you have to pay interest. This interest can range from 4.45–7% for federal student loans (in 2018) to a high of 11–15% for private student loans. You should use student loans as a last resort for buying an apartment. You should always try and fund other ways, which will leave you with little debt to pay off after you graduate.
The most important aspect of renting an apartment is to ensure you have roommates. The more roommates you have, the more you can afford. From 2002 to 2012, the percent of Americans that had roommates have increased from 25.4% to 32.0%. Overall, having a roommate, allows you to afford a better apartment, split the cost of utilities and rent, and allow the cost of groceries and entertainment to be split.Choosing an apartment can be a difficult decision when it comes to finances. Using these steps and tips can help you afford an apartment with resulting in low debt after college.
Works Cited
Brown, Mike. “9 Best Private Student Loans of April 2020.” LendEDU, Mike Brown, 1 Apr. 2020, lendedu.com/blog/private-student-loans/.
McCarthy, Niall, and Felix Richter. “Infographic: Americans Living With Roommates: A Growing Trend.” Statista Infographics, Nial McCarthy, 6 Nov. 2014, www.statista.com/chart/2916/americans-living-with-roommates/.
Stobierski, Tim. “Pros and Cons of Student Loans.” Student Debt Warriors, Tim Stobierski, 5 Sept. 2019, studentdebtwarriors.com/students/pros-and-cons-of-student-loans/.
US Government. “Federal Interest Rates and Fees.” Federal Student Aid, US Department of Education, 1 Feb. 2020, studentaid.gov/understand-aid/types/loans/interest-rates.
This is an interesting topic because everyone talks about saving up for the big thing which is college tuition, but not the expenses on the side. Your post talked more on the tips and tricks of what to do when the college of your choosing doesn't have dorms, but they can also apply to the general cost of living while in college. A lot of what you said is applicable to life after high school in more ways than one. It's also a good idea to get a job because student loans aren't always the best idea, as you said, but it's interesting how you included that there is an upside to them that I've never considered before.
ReplyDeleteIt's important for high school students to understand how to take care of themselves financially and not to follow in the mistakes of others. In this case, using student loans for housing, which might sound efficient, paying 1 bill for college and housing. But you brought to light how this is a bad idea due to the high interest associated with student loans. Thank you, I haven't heard this anywhere yet, and I think this information will be useful to keep in mind when we leave for college.
ReplyDelete-John Maki
The approach you took to give advice on balancing finances was really interesting. The data you provided on interest rates and roommates allowed for the writing to excel. Overall, I agree with you that applying for student loans should be a last resort because it can get expensive after college if you do not budget correctly. I would say that in high school, although it is important to live life in the moment, pay attention to your future. If students were to have a healthy budget while in high school, paying for college would be less of a stress. While students can look for apartments, depending on how far the college is, you could also consider living at home. While living at home may not be as fun for a college student, it would be more affordable even if your parents expect a small portion of rent. In the end, the information that you wrote could help students decide on how to approach balancing their finances.
ReplyDeleteThis is an important topic to address because many students are getting ready to go off/fund for college at this very moment. For me being a senior in high school, I really enjoyed reading this because it gives me options for what I can do when I continue financing for school, seeing as I am going through this process. I have to take many things into consideration: Housing, meal plans, financial aid packages, and many more expenses all come into play. It's important to get on top of this early in order to ensure you will minimize future debt and balance your finances early on.
ReplyDeleteBeing the first large-scale spending that most people will do, the idea of college is hard to wrap your head around when it comes to funding. This article is extremely useful in putting that into perspective and how to deal with the burden. It seems that best case scenario you would go to a local college and live at home. But that obviously isn't available for many people. I agree with your position about how student loans should be avoided as much as possible due to interest. I think it is also very important that you are confident in your future income before you take out such a large loan if you must. Student debt is a very real problem that so many suffer from every day so it will help out a lot to reduce the number as much as possible and pay it off as soon as you can.
ReplyDeleteI really liked this topic. I do think that student loans sometimes are a scary thing to hear, but like you said, they can build up your credit. Personally, I am attending a college that doesn't have dorms, I'm living at home. This way for me I'm saving money to buy an apartment when I truly need it.
ReplyDeleteI think this was a good topic to talk about. It is really important, as High School students, that we think about apartments whether we get one one of our first years of college or after college. It is also helpful people know that paying off loans is helpful towards building up credit because it will help us in the future, but may also want to be avoided due to the high interest rates. College and living on your own is a lot to wrap your mind around but this was definitely a good start in thinking about next steps.
ReplyDeleteSince all of us are either graduating this year or a year from now, I can definitely see this topic being applicable to nearly everyone in the future. You talk a little bit about credit, yet you don't really go into detail as to what it is. Is credit some sort of binding limitation that could hurt us down the road, some sort of statistic that we carry with us no matter where we are financially, or both and more?
ReplyDeleteThis is really important for many of us graduating this year or next year. Understanding how credit will affect our lives forever, making sure it stays up or building it up is very important. Along with that, having student loans is very important for building credit, however making sure you are paying them off on time will allow you not to be in huge amounts of debt later on in life.
ReplyDeleteThis was a really good article and very relevant for so many students. I am attending a college next year where I will be able to stay in a dorm but I know by my second year I will want to be in an apartment with some roommates rather than in a tiny dorm. This article laid out all the big things you need to know as a young adult taking a huge step like renting an apartment.
ReplyDeleteThis is really important to think about because this applies to so many people. Housing is a really important part of deciding where to go to school and how to finance other options. Obviously the easiest thing is to stay local and save money until you are ready to move out, but that isn't always an option so having ideas on how to finance housing is really important.
ReplyDeleteI agree with what you said you do need to apply for financial aid It helps.
ReplyDeleteI've thought about this topic a lot and while I don't think I want roomates, I'll probably need to have some. Student loans, on the other hand, I never considered could be used for something like buying an apartment, but that just seems like you would slip into debt very easily, and if there's one thing I know I want when I'm an adult, it's not a lot of debt.
ReplyDeleteI agree there's plenty of college's that don't offer dorms including the one I'm going to and apartments aren't cheap especially with landlords
ReplyDeleteThis article was very beneficial to read because it applies to a lot of people. Since I am approaching senior year, I have been thinking about college a lot. It is important that high school students know how to responsibly manage their money in the real world, so this article was very relevant for us to read. Especially the housing, that has been a topic of discussion going on in my house lately. It has been a tough decision for me if I want to stay local and pay less, or move away and get the real college experience. This article did a good job providing further information on housing.
ReplyDeleteThis was a really good topic to choose considering that we are all heading to college shortly! When you were talking about student loan interest rates, I was so surprised at how high they are! I didn't realize that they are 11-15%, but I guess it makes sense considering the risks that come with giving loans to college students who are not yet financially stable. You presented good alternatives to taking out student loans to pay for college and housing!
ReplyDeleteThis is a great topic as we are soon going to college. Being able to save money is a huge thing and is very important. In your blog I really appreciate how you said that Student Loans should be a last resort. I completely agree with this. Student loans can get very expensive and should never be the first thing someone tries to do while paying for college. Kids need to be able to earn their own money first and find other ways of paying for college instead of going for student loans. If your truly committed to going to college, getting a job and saving up a lot of that money is one of the best ways to go.
ReplyDeleteAs easy as it may seem to be able to get a job while you are in college in order to help with paying off student loans, I do feel that that is not the best way to easiest way to get money while you are in college. I do not know from experience obviously but I do feel that being in college is already stressful enough with school work, let alone trying to balance a whole different job on top of that. You would have very little social life in college, which would take away from some of the fun of going to college out of state or in state at a big school.
ReplyDeleteThis was a very helpful. It's true all of us will go through the process of planning our finances for the future sooner or later. I've seen a lot of articles discussing this topic already, but this one did bring up new concepts and tips that I found helpful. For example,I had no idea that student loans can also be used for housing.
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