Student loans steal dreams.
30 years ago, we didn’t recognize that. We assumed that a small amount of money borrowed in the form of a student loan, used to supplement other forms of payment, were a viable option to fund a college education.
But fast forward to today and we see quite a different reality. 1 in 5 student loans go into default. That’s higher than the default rate of mortgages, credit cards, auto loans, personal loans, and payday loans combined!
The average student loan, depending on which survey you look at, is $26,000-$38,000. That’s about $355/month for a 10 year repayment schedule.
But that’s just where the problems begin.
Only 50% of people that enroll in a 4 year institution will graduate with an undergraduate degree. The rest drop out. They went to college to get training and education, and instead left with no piece of paper to show for the money they borrowed to pay for the education they couldn’t complete.
Then they meet Mr. or Mrs. Right. Who also has $26,000-$38,000 of debt. So now this new household starts off life with $52,000- $76,000 in student loan debt. That’s $710/month for the next 10 years!
They still need cars. They still need a house. They will still buy furniture, and electronics and if all of the studies are correct, they will finance that stuff too adding even more to their debt burden.
They will feel crushed by the weight of life. We know the economy is slow to hire young talent. Yet our young, newly married couple doesn’t have the luxury of time to wait for their incomes to rise. They don’t have the privilege of asking, “what type of work am I passionate about?”
Instead they wake up in the morning after hitting the snooze button 18 times because they dread going to work at a job they’re not passionate about. A date night with their new spouse is unattainable because there is no margin in their finances or in their time. A new mother that wants to stay home from work with her baby just a little while longer grows to resent her husband that doesn’t make enough money…
Student loans steal dreams.
There’s a better way to get a college education. One that doesn’t rob you of a future. If your parents didn’t save up to pay for your school, you can still get a degree without borrowing a dime of money.
It seems the best way to avoid paying student loans is to not get student loans.
Here’s how to avoid paying for student loans:
Step One: Concurrent Classes
Many community colleges across the country have partnered with their local school districts to provide college credit for general studies courses that you are required to take in high school anyway. Your book is provided for you by the high school. All you have to do is pay the community college tuition rate, which is often discounted for concurrent students.
Depending on your school district, I’ve seen some students that are able to earn up to 48 credit hours while still in high school. That means at 18 years old you’re almost a Junior in college!
Step Two: Community College
Community college tuition rates are a fraction the cost of 4 year institutions. Take advantage of this to finish your general studies course work. If your local community college offers a course that the university you want to go to offers, why not save some money and transfer the credit hours later?
Step Three: Scholarships
Even if you’re not a top athlete, gifted musician, or brilliant student there are thousands of scholarships available. Look for them and apply for them! Sure they’re not the big “full ride” scholarships. But if you can spend an hour filling out the application to receive a $200 scholarship you’ll be hard pressed to find a better paying part time job.
Step Four: Volunteer
This may not help directly pay for your college. But it is a fantastic way to get to know people in the community, to serve others, and to possibly get a free meal out of the deal. While you’re in school you need to work on building your network outside of your beer pong and keg stand buddies.
Step Five: Housing
Living on campus can be an awesome experience. It can also be ridiculously expensive considering you’ll need to purchase a meal plan too. Look into a cheap apartment off campus that you can share rent with some roommates. This is one you may need to weigh out the expenses. You’re in college, it’s okay to be broke.
On campus housing will include your internet, cable, water, electricity, etc. Also some scholarships may require you live on campus. Do the math to see what works best for you.
Step Six: Summer classes and Mini-terms
Take full advantage of these. The faster you can get through school the cheaper it will be for you. This may mean you give up a week at Christmas break or cut your summer short, but it also means you can shave off almost a full semester of classes every year.
Step Seven: Work
It’s a foreign concept that you would actually work while getting an education. But working 20 hours a week at a part time job while going to college full time has tons of benefits to it. You will graduate faster. You will study harder, giving you a higher GPA. You will have something to put on your resume. You will have built valuable business connections.
These seven steps may seem like hard work. To some they may seem impossible. But when staring at the thought of working a job you hate for the next decade, it’s probably worth a shot.
What are your thoughts? Is it possible to be a student without a student loan? Tell me in the comments below.
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