I accumulated a good bit of debt when I went to college. Initially, I attended a school I really couldn’t afford, but it was by far my favorite school, it was relatively close to home, and I went with my heart instead of my head.
Unfortunately, that emotional decision required me to get student loans for the first couple years so I could finance tuition costs. I scraped up enough other money for incidentals (books, utilities, pizza, football tickets ‘ you know, the bare necessities), and my mom managed to cover my housing ‘ even my apartment rent when I moved off campus my sophomore year.
I eventually returned home and bounced around some before finishing my degree online. Over the years I worked full time, took advantage of a tuition reimbursement program (which eventually went away in the months following 9/11, when the economy went south), and finally managed to graduate with minimal debt.
Upon graduation, one of my life goals became helping my kids finish college debt free. I knew I had to start planning, and saving, early. We have opened 529 plans for our kids and try to sock away some money as we can.
We also plan to use a combination of the following strategies to help them reach the goal of a debt-free education.
5 Ways to Minimize Debts While in School
1. Choose your school wisely. Unless you plan to study a very specific field with minimal offerings from most schools, it probably makes sense to consider an in-state school, where tuition is usually a fraction of that at an out-of-state school.
2. Consider a 2-year degree path at a local college for core requirements. Looking back, I wish I had stayed home the first couple years, attended a local school and worked to save towards my four-year degree costs. If you go this route, first verify that your ultimate school choice will accept transfer credits from the local college or university you plan to attend.
3. Work while in school. In a perfect world you would not have to work while in school. You could devote 100% of your efforts into getting your education. But let’s face it; this is not a perfect world. Few parents can afford to send their kids to school and cover 100% of the financing.
Your education is ultimately your responsibility, so if you want it bad enough, you can get a job and subsidize some of your costs. You’re building your resume and developing work ethic’ two things you can’t get from school anyway.
4. Take a year off after high school. This is a controversial idea, and I know there is a risk if you take time off you may never return. I get that. However, I left for college when I was still 17 (had a late birthday). I still had lots of growing up to do, and looking back I probably would have benefited from another year to mature.
I also could have worked that year and cash-flowed my first year of college, giving me a head start towards a debt free education.
5. Take classes during the summer and graduate early. If you can swing it, plan to stay on campus during the summer and take a couple classes. You will graduate a semester or two early, which translates to less meal plans, less rent for that off campus apartment, etc. In my experience, I also found relaxed professors and graduate assistants and an overall more relaxed environment than the hustle and bustle of fall semester.
Three years ago I wrote about the coming bubble from student loan debt, and I still believe graduate indebtedness will be one of the larger financial problems for the next generation. In a small way, I’d like to help reverse that trend.