How To Limit Student Debt
Written by: Aiden B.
With college nearing us one of the biggest challenges will be coming with it, Student Loan Debt. It has become a problem for young people getting out of college and having to face thousands of dollars in debt due to student loans which can take years to pay off. If you have ever heard the saying that plumbers make more than doctors until they are 50 that’s because of student debt that they are paying off for nearly their entire life.
You can see from this graph showing the growth of student loan debt over the years and it is continuing to rise. According to studentloanhero.com there is $1.71 trillion in total U.S. student loan debt and there are 44.7 million people in the U.S with student loan debt so chances are you won’t come out of college with no debt, but there are ways to limit the amount of debt you have. I have found a few ways to help reduce the student loan debt you will almost inevitably face if you choose to go to college.
The first piece of advice I have for you in order to limit your debt rests on the school you choose to attend as that plays a huge role in how much debt you come out with. When going to college try and pick an affordable school such as a school in state that offers in-state tuition as this will greatly reduce the amount of debt you come out with. In-state tuition is usually much much less than out of state tuition which can be in the 30-40 thousand range and sometimes can be even more. You can also look at agreements between states such as the reciprocity agreement between Minnesota and Wisconsin that allows you to go to school in Minnesota for in-state tuition while being from Wisconsin.
Another huge thing you can do to limit student debt is applying for Scholarships and Grants because while you may think of scholarships as the full ride scholarships that athletes get there are actually many more scholarships that anyone can apply for which can take hundreds to thousands of dollars off of your tuition. There are plenty of different scholarships for everyone. Some jobs will offer 1,000 dollar scholarships if you work there as a senior, or some clubs offer scholarships so these things are for just about anybody not just the high level athletes and the people with perfect grades. I would recommend applying for every scholarship that you qualify for, in order to try and get as much money for college as possible as there is no negative to applying for scholarships.
Another way to reduce student loan debt is to refinance your loan. What is refinancing your loan exactly, is when you apply with a private lender in order to reduce the interest rate which can save you thousands of dollars through the years. However refinancing is not for everybody as you need a good credit score and you will want to have a stable income and employment and financial security. If you choose to refinance your loan you will no longer be able to use or apply for federal repayment options so you will want to be confident in your financial situation and your employment stability.
In conclusion these are only a few of the ways you can limit your student loan debt as there are tons of other ways such as some of those other federal repayment options, but these are three ways that I found in order to help you reduce your debt coming into college as well as once you've left college by looking at affordable schooling, applying for scholarships and if possible, refinancing your loan.
https://www.thebalance.com/reduce-student-loans-in-school-4046157
https://studentloanhero.com/student-loan-debt-statistics/
https://www.moneyunder30.com/reduce-student-loan-debt-guide
https://www.nerdwallet.com/article/loans/student-loans/what-is-student-loan-refinancing
https://www.statista.com/chart/15235/outstanding-student-loans-in-the-us/
I didn’t know about refinancing a loan and I agree that it can be a good way to pay off student debt. However, I’m not sure refinancing your loan would be the best option coming right out of college because as you mentioned, you need a good credit score to be applicable for it. You usually have to take a lot of time to build up a good credit score and that's something that college students might not have, coming right out of college. However, it would be a good option if 10-15 years down the line, you are still paying off student loans and you have built up a good credit score.
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ReplyDeleteI really like what you wrote about. i always wondered about ways to limit student det. i learned that there is 1.7 trillion dollars in student debt and i imagine that it keeps going up.
ReplyDeleteI didn't know much of anything about a refinancing loan or what it was. After reading your piece however, I know much more about it and I must say I agree that it is a good way to pay off student debt assuming you're eligible to pay for it. Having a good credit score when you're in debt from school isn't easy and the only way you're eligible for a refinancing loan is with a good credit score. If you are eligible for this type of loan however, I believe that it is a very good way to pay back college debt.
ReplyDeleteIt's very helpful to read about something that almost all of us are going to have to deal with in the very near future. I found it interesting to learn about so ways to limit your debt coming out of collage. As we all know collage is expensive so any way to keep my debt low is a wonderful tip.
ReplyDeleteAs a senior I've heard so much about scholarships and grants but not nearly enough about loans so I think it's super great you touched on them. Maybe it'll make the school realize they should teach us more about those sooner. I do wish you would have touched on Work Studies a bit as those are a great way to pay off some student debt while in college.
ReplyDeleteBefore knowing what refinancing a loan is it sounds difficult to do. I do agree , try to get as many scholarships as you possibly can, there is no negatives to doing that.
ReplyDeleteI’m getting really close to starting the process of getting a loan to pay for my college education and I was shocked to see the information about refinancing a loan. Although I don’t have the credit score now to be eligible for it this could be very useful if I chose to go into grad school. By then I will hopefully have a good enough score be eligible
ReplyDeleteThis is a really good piece. Since I'm already through the initial application process for school and scholarships I had to talk a lot with my parents and think to myself about what was really going to be the best option for me. A lot of the things you said couldn't be more true. I do believe however that finances shouldn't make decisions for your education because you can get out of debt and it won't be that difficult if you are truly care about your job and what you are doing.
ReplyDeleteI have never heard of refinancing loan, but is there more ways than just Choosing a school, scholarships, and refinancing loans? You did a good job on your piece.
ReplyDeleteI really like this post. We have talked alot about this and ways to avoid it. Making sure you are choosing the best option for you. That is a huge piece but the main goal is to be able to live without student debt. That is a good goal for many to try to achieve and that could really set you apart from others. $1.71 trillion in total U.S. student loan debt and there are 44.7 million people in the U.S with student loan debt so chances are you won’t come out of college with no debt, but there are ways to limit the amount of debt you have. This is something that should motivate you because it is a good piece of information to know. I plan on not being in the 44.7 million but that is just a goal. Overall, great piece!
ReplyDeleteI thought you did a good job with this peace. I think that most people go into college because it is the next step in life and they really don't know what they are getting into with the amount of debt that has to be accumulated over the span of 4 years. A thing that I learned from this was how you can refinance a student loan. I have never learned about that an it was good to know about that for my future. Overall, you did a great job with giving a lot more insight into student loans and I know more because of this blog post.
ReplyDeleteThis is a great article for those that are going into college in the next couple months or near future. I think we hear a lot of different ways to limit our student debt but it all comes down to how to plan things out. In the past few years, student loans have continued to be a huge problem and people end up paying them for years on end. It’s important for us young people to know that we have so many opportunities to plan our education out financially like looking for more affordable schools like community college or in-state, getting grants and scholarships or even taking a gap year to work full time so you can be somewhat financially aware of the cost of your tuition. Overall, awesome job and this was really informative!
ReplyDeleteThis is becoming a more important topic as I approach college. The amount of student debt is really astounding. I liked your use of the graph to really show it, rather than just saying it. Personally, I have tried my best to limit student debt by going to a college in-state, and by doing scholarships. As my dad says, “If you spend 2 hours writing an essay, and are awarded a $500 scholarship, you have just made $250 an hour.” It’s basically free money, so I really encourage you to apply to as many scholarships as you can. Overall, very good blog, on a great and important topic.
ReplyDeleteAs a junior in high school I have been looking at colleges and I have noticed how crazy expensive some of these high end schools can be. I never knew that plumbers make more money than doctors until their 50. That is crazy. I have realized that going in-state for college would be significantly less expensive than if I were to go out of state and I will definitely take that into consideration when choosing a school. You also stated that you can apply for scholarships which I have already started to do so I can try and get as much money off as possible. I’ve noticed that it is easier for out of state students to get into colleges just because the colleges can charge them more… Do you think this is fair for colleges to do?
ReplyDeleteThis is a relevant and useful posts, especially for the current seniors. The first two ways of minimizing student debt that you mentioned I was aware about and have been doing, but I didn't know what refinancing a loan was until you listed it. It certainly seems like one of the most useful of the three since it lowers the interest rate, but also more difficult since you need to have a stable job to get to that point. Obviously, refinancing will take place well into an individual's career so I will keep that in mind once I get to that point, and still need to pay off debt.
ReplyDeleteThis was a very helpful post because you gave a variety of methods for reducing debt and even offered some pros and cons for each method. I think the method I've used the most has been looking for scholarships and grants, but I can certainly see the value of the other methods, especially refinancing a loan.
ReplyDeleteI think this is very helpful when it comes to high school students. There seems to be a problem with people going to college without the money to pay it, getting loans, and then, because they rely on that degree, don't end up paying the loans off. The scholarships are probably the most important of them, since there are millions of unallocated scholarship dollars every year because people don't apply for them.
ReplyDeleteStudent loans need to come down in price in order to prevent students from going into debt. Debt creates many financial and well being problems in a person and to put this on someone so young is wrong. These predatory loans need to be an end to.
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